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- Aside from reaching targets, goals,
SMDB
Sales Force Management
Importance of Sales Force Management
● As more companies realize the importance
of efficient management of sales teams,
they start to invest more in training,
formulating strategies, and team building.
Here are some more reasons for you to
invest in salesforce management:
- BETTER SALES OPERATIONS
- Efficient sales force management
ensures that all moving parts of
sales operations are working well to
guarantee the end user a
satisfactory experience. The
competitive edge of thriving
enterprises lies in sustaining regular
customers. Whatever the
product/service may be, a good
sales force is able to guarantee
good experiences to customers,
which is a direct result of an
efficient sales management system.
- A BETTER UNDERSTANDING OF THE
MARKET
- Salesforce management allows for a
better understanding of your
market, keeping you up-to-date
with new trends and the ability to
apply these trends to sustain
relevance within your market niche.
Relevance is key to sustaining
growth in competitive
marketplaces. Your sales team is
tasked to keep your brand and
product/service relevant and
moving towards an excellent
customer experience.
- DEFINED SALES STRATEGY
and objectives for the business,
sales force management formulates
strategies that are designed
specifically for the product/service
offered. Being able to formulate
strategies brings in systematic
methods of continuing sales growth,
expansion of market reach, and CRS
or Customer Relations Systems
tailor-fitted to the company. In
strategizing, one size does not fit
all. Enabling your sales team to
create strategies to zero in on
specific demographics or niches
opens new doors for the enterprise.
SALES MANAGEMENT
Sales Management refers to the process of
developing a marketing team, leading a marketing
team, coordinating sales activities, and
implementing sales techniques. The general goal of
sales management is to help a business achieve its
sales objectives or, ideally, exceed them. Sales
management is part of an organization’s total
marketing mix.
This business discipline tries to effectively allocate
people and other resources to achieve objectives,
both in the long and short term. Although there are
countless activities in sales management, the core
is limited to creating supply and demand
predictions, planning a sales strategy, budgeting,
training, recruitment, and selection, setting quotas,
and evaluating sales performance. Sales
management is not specifically about managing
just these activities, but rather the people who
carry them out.
This is also the role of a sales manager. This person
creates an environment and opportunities for
salespeople to help them perform and plays an
important role in researching and resolving issues
related to sales productivity.
SALES PLANNING
Sales planning is the process of developing
objectives and coming up with a plan to effectively

achieve them. These sales management activities
are what sales management is all about. The
following elements are important to any sales
plan:
SITUATION ANALYSIS
- Sales Planning involves first evaluating the
current sales process for a particular
product or service in a certain region or
market. The current sales process needs to
be carefully analyzed, for instance with a
situation analysis.
OBJECTIVES
- After the Situation Analysis has been
carried out, you can start coming up with
an objective. The type of objectives
depends on the situation in question. For
SALES BUDGET
instance, one possibility is to focus on
revenue, or you could look at the product
margins by examining the procurement
process. Other objectives in sales planning
might include: improving customer loyalty,
reducing sales costs in relation to revenue,
increasing customer satisfaction, or
generating more leads for potential
customers. Make sure the objectives follow
the SMART criteria.
RECRUITING, TRAINING, AND MANAGING SALES
PEOPLE
STRATEGY
- How the strategy will look depends entirely
on the objective that was set by sales
management. If they’ve decided to increase
sales per salesperson, they could decide to
implement a bonus system that incentivizes
the sales force with monetary rewards for
positive sales figures. If the goal is to
increase customer satisfaction, this means
improving customer service.
SALES & OPERATION PLANNING (S&OP)
- Next the strategy has to be coordinated
with all relevant parties. This is called Sales
and Operations Planning (S&OP). A good
S&OP is vital in making the strategy
successful. It brings together supervisors
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from operational departments and
determines whether and how the company’s
resources can best be used and if it might be
necessary to increase the budget. In short,
S&OP means balancing the sales
department’s objectives with the
organization’s available resources and
capacity. Sales and operations have
different interests. For instance, the sales
manager would like to see a wide range of
products and services being offered to meet
all customer desires and demands.
Operations see a lot of hurdles when they
hear plans like this. Their resources are
limited, so compromises have to be made.
- Generating a Sales Budget based on the
chosen strategy is an important step in
structuring a sales plan. It takes projections
of past and present sales figures into
consideration in relation to the company's
expenses. The more past figures are
available, the more accurate the budget
will be.
- Salespeople have an important role in Sales
Management. Regardless of how large or
small the sales team is, it’s important that
it’s managed properly. It all starts with
recruitment and selection of the right
candidates. Before embarking on the search
for these candidates, there has to be a clear
idea of what they should be able to do,
which skills they need, and whether
additional training is required. These
competencies can be determined using a
competency framework with the help of the
HR department.
- New salespeople will first have to be
introduced to the company, the products or
services, the people they’ll be working with,
and the customers. It is recommended to
develop an onboarding process for this. An
onboarding process provides basic

information about the sector and the
organization’s position within it.
Salespeople have to learn about the
organization’s goals and how they can be
achieved. Some candidates require a longer
onboarding process than others. If they’re
new to the industry, it will take more
getting used to than someone who has been
in the business for a while.
- Clear individual goals have to be linked to
the salespeople based on the sales strategy.
Make sure that these goals are reasonable
considering the experience they have and
for the region, they’ve been assigned. Goals
that are too easy may result in reduced
revenues, goals that are too hard may
undermine motivation and make people
pessimistic.
- Salespeople make the difference when it
comes to sales figures, so they require
careful monitoring. One famous method for
this is analyzing conversion ratios. This
refers to the number of visits, contacts, or
other communication instances that are
necessary to sell a product or service to a
customer. A conversion ratio that’s too low
can have different causes. Also, take the
salesperson’s experience into consideration.
If it’s not related to the salesperson’s
competencies, it could have something to do
with a fundamental issue with the product
or service. The responsibilities or regions
that have been assigned to the salesperson
might simply be too large. Another
frequently used method is conducting
opinion polls.
CUSTOMER RELATIONSHIP MANAGEMENT
(CRM)
- In Sales Management, people often talk
about CRM. CRM refers to the actions,
strategies, and technologies that are used
to manage customer relations and other
data. The goal of CRM is to improve the
relationship with the customer and help
with attracting and retaining customers for
revenue growth.
- Within sales management, CRM can be
discussed from different perspectives. If
you’re talking about the technology behind
CRM, it usually refers to a software tool
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that sales teams use to record leads and
interactions between the company and
customers. CRM as a strategy is about the
corporate philosophy and how customer
relations can best be managed. CRM as a
process is about the steps that are required
to retain and strengthen customer relations.
ROLES OF THE SALES MANAGER
- The sales manager plays a key part within
sales management. The sales manager is
responsible for meeting sales targets and is
the person who generates revenue for the
business. Because of this responsibility, it is
the sales manager who has to know what is
going on around the office, particularly
among the sales force.
- The sales manager doesn’t work alone but
has a team. Naturally, the sales manager
makes sure that they set targets that are
realistic and achievable. He then delegates
these duties, depending on the strengths
and interests of the salespeople. He knows
who can carry out the task in the most
effective way. It’s his task to get the most
out of every employee.
- Motivation is a big factor. The sales
manager can employ different measures to
improve motivation. For example, he may
offer incentives to employees to encourage
them to give it they're all. The atmosphere
in the team needs to be good too. That’s
why one of the roles of the sales managers
is to support their team and be at their side
in times of crisis as well as success.
WEEK 3
Customer Relationship Management
WHAT IS CRM?
- Customer relationship management (CRM)
is a systematic integration of information
technology and human resources designed
to provide maximum value to customers
and to obtain maximum value from
customers.
- CRM uses information to meet customer
needs, for example, technology can be used
to match up five million different

promotional products with five million
individual customers.
RELATIONSHIP ORIENTATIONS AND CRM
CRM
● Mass Marketing - Mass marketing is a
way of dealing with customers by offering
the same product to the entire market.
● Differentiated Marketing - Differentiated
marketing is selling to different groups of
customers by offering a unique product for
each group.
● Niche marketing - Niche marketing is
offering a specialized product or small
range of products to an individual customer
segment with specialized needs.
● One-to-one marketing - One-to-one
marketing involves matching individual
products with individual customers. The
result is a product personalized for each
customer in some way.
ORIENTATION
● Production orientation - Production-
oriented companies focus on processes,
allowing large-scale, efficient, and
economic production.
● Marketing orientation - Marketing-
oriented companies focus on making what
could be sold, not selling what is made.
Market-oriented firms are customer-centric,
where customers are the heart of the
business process.
CRM AND REPEAT BUSINESS
● CRM is based on the premise of serving
customers over an extended period, thus
generating repeat business.
3 LEVELS OF BUYER-SELLER RELATIONSHIP
INTERACTIONS
● LOW →TRANSACTIONAL SELLING
● MEDIUM→RELATIONSHIP SELLING
● HIGH →STRATEGIC PARTNERSHIP
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TRANSACTIONAL SELLING
- It attends to short-term customer needs.
- It requires more frequent sales calls.
- Buyers and sellers remain independent.
- It involves no long-term commitment or
loyalty.
- It is more adversarial than cooperative.
- Price is a key consideration.
RELATIONSHIP SELLING
- Attracting new customers costs significantly
more than reselling to current customers;
thus the focus is on customer retention.
- In relational exchanges both the buyer and
seller recognize that each transaction is
merely one in a series of purchase
agreements.
- It involves a spirit of cooperation
between buyer and seller.
- Firms seek to develop profitable,
ongoing relationships with
customers
- Firms focus on providing
exceptional service.
- It requires higher levels of trust.
STRATEGIC PARTNERSHIP
- Strategic partnerships result when the
goals, strategies, and resources of buyers
and sellers become so interconnected and
intertwined that they develop an
integrated, symbiotic relationship although
still retaining their independent identities.
- involve firms that capitalize on the
relative strengths of each partner
- are based more on inter-
organizational collaboration
- involve collaborative decision
making
- require that firms share managerial
resources and expertise
- depend on partners showing high
levels of collaboration
- require equality among partners
- involve firms that share vision,
benefits, and goals

- involve extremely high levels of
trust
MECHANISMS THAT GOVERN EXCHANGE
● Governance refers to the mechanism that
helps ensure the exchange is fair to all
parties involved.
● Transactional exchanges are controlled by
market forces.
● Relational exchanges are governed by
contracts.
● They include arrangements for sharing
information and tasks between the buying
and selling firm, but fall short of spelling
out specific obligations for each party.
● Strategic partnerships are governed by a
mechanism known as relational
governance.
● In all exchange relationships, opportunistic
behavior may occur.
CRM, CUSTOMER LOYALTY, AND LIFETIME
VALUE
● CRM can lead to customer loyalty, which is
important when a firm expects repeat
business from a customer.
● Customer loyalty is a function of two
components:
○ Customer share - Customer share
is the proportion of resources a
customer spends with one among a
set of competing suppliers.
○ Customer commitment - Customer
commitment is the bond between a
customer and a sales firm.
COMPUTING VALUE OF A CUSTOMER
● Customer lifetime value (CLV) is a monetary
amount representing the worth of a
customer to a firm over the foreseeable life
of a relationship.
where
CLV = the lifetime value of customer
R = the revenue gained from the
customer in a time period
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C = the cost of the sales and service
effort directed at the customer
RISK OF RELATIONAL SELLING
● Although relational selling and strategic
partnerships have advantages, some
disadvantages include these:
○ increased dependency on a major
buyer
○ loss of flexibility to capitalize on
future business opportunities with
new customers
○ growth of complacency with current
customer(s) and decreased
creativity
THE SALESPERSON AND MANAGING CUSTOMER
● Value is often narrowly used as a synonym
for low price.
● Value is an individual’s selective perception
of the worth of some activity, object, or
idea.
● To create value, salespersons can do the
following:
○ gather important data about the
customer and the market
○ identify the types of data needed to
give the customer better service
○ provide input into how the CRM
system should use data to create
value for the customer
○ manage the relationship between
the firm and the customers to whom
the salesperson is assigned
PRODUCT AND CUSTOMER PORTFOLIOS
● A product portfolio contains a set of
products a salesperson is responsible for
selling.
● Customer portfolios are sets of customers
that have common traits, for example,
assigning salespeople based on medical
specialties such as pediatrics or cardiology.
CRM AND PRODUCTION SYSTEM
● There are two types of CRM systems:
 6

○ Analytical systems ● order entry

■ Analytical CRM focuses on ● data entry
aggregating customer ● team selling materials
information electronically, ● sales tracking
enabling the company to
better identify target CRM HARDWARE
markets and opportunities TYPES OF CODES OF ETHICS
for cross-selling. ● PDAs, laptops,and servers -
○ Operational systems ● Database Marketing - Database
■ Operational CRM is more marketing refers to a computerized process
focused on using for analyzing customer databases in a way
information to improve that allows more effective selling by
internal efficiencies, such as tailoring product and promotional offerings
scheduling logistical and to a specific customer’s sales patterns.
production operations.
● Data warehouse - A data warehouse is an
electronic storage center containing data
TECHNOLOGY AND CRM PROGRAMS records from diverse information systems
● Web technologies and CRM that are shared across all functional
○ Web-based technologies have departments.
increased the effectiveness of CRM
● Data mining - Data mining is an
systems by allowing the sharing of
exploratory statistical analysis of data in
information between buying and
the data warehouse whose objective is to
selling firms.
identify relationships that enable customers
○ With push technology, e-mail can
to be targeted more accurately.
be sent to a particular customer or
customer group that might be
CRM SOFTWARE
interested in purchasing products
● Multivariate statistical tools are necessary
going on sale.
for CRM
● Integrated web solutions
○ Cluster analysis
○ When firms take a relational
○ Discriminant analysis
approach or become strategic
○ Multiple regression
partners, integrated Web solutions
○ Automatic interaction detection
can give secure access to a strategic
partner’s decision support system in
CRM SUCCESS AND FAILURES
● Despite CRM’s popularity, its adoption is no
dealing with inventory systems.o
guarantee of success.
● CRM is not for firms using a transactional
SALES FORCE AUTOMATION
approach.
● Sales force automation (SFA) is an
● CRM is also not for firms whose customers
integrated system of computer software
won’t realize added value from the benefits
and hardware that performs routine sales
provided by the CRM process.
functions.
FACTORS CONTRIBUTING TO CRM SUCCESS OR
● An integrated SFA system ties together
some or all of the following functions:
FAILURES
● Some factors contributing to success or
● expense reports
failure of CRM implementation include the
● presentation software
following:
● sales call scheduling
○ whether top management gives its
● territory management
support
● proposal generation

○ whether sales managers and sales
force buy in to CRM
○ confidence in CRM vendor
○ training
○ a well-defined sales process
○ expectations
CRM SALES FORCE AUTOMATION (SFA)
ADOPTION HINDRANCES
● Salespersons may feel less job security.
○ Sales managers can overcome this
problem by convincing salespersons
the benefits of CRM—help them sell
more and earn higher bonuses
and/or commissions.
● Assure sales force that neither CRM nor the
SFA components replace selling processes.
● These high-tech components merely
enhance the activities of sales managers
and salespeople.
WEEK 4
Selling Process
UPDATING THE ROLES OF SALES PEOPLE
● With readily available information,
customers have become empowered.
● They expect greater value at lower prices
while demanding better service.
● Salespeople face sophisticated buyers with
high expectations.
● Present-day salespeople are also
developing a new level of professionalism
as they face sophisticated buyers with high
expectations.
● Opportunities can be found in personal
selling:
○ Salespeople are in high demand.
○ Six-figure signing bonuses are
available.
○ Top performers can earn over $1
million a year.
● Sales careers are open to different types of
individuals:
○ from different cultural backgrounds
○ from different ethnic group
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○ representing different demographic
variables (for example, gender,
education level)
○ with different personalities
● Everyone sells something.
○ All engage in persuasive two-way
communication to convince (sell)
others in various situations.
CUSTOMER RELATIONSHIP MANAGEMENT
● With effective CRM, salespeople can reduce
customer defection by creating customer
loyalty.
● The contemporary salesperson has these
traits:
○ is customer oriented
○ focuses on serving customers
○ listens to and communicates
meaningfully with customers
○ stresses customer benefits and
service
○ develops long-term, mutually
beneficial relationships with
customers by solving their problems
○ follows up with customers to
provide service and ensure
satisfaction leading to customer
loyalty.
THE PERSONAL SELLING PROCESS
● There are seven interacting, overlapping
steps in the professional personal selling
cycle.
➢ STEP 1: Prospecting and Qualifying
○ Prospects are potential new
customers.
○ Leads are the names and addresses
and details of a person or
organization that may have a need
for a product or service.
○ To become a prospect, a lead must
be qualified in terms of four basic
criteria that can be remembered by
the acronym N A M E, as follows:
○ Need or want
○ Authority to buy
○ Money or ability to buy
○ Eligibility to buy
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Qualifying: How a Lead Becomes a Prospect several salespeople join

● A lead points to a potential buyer. efforts to call on every
● Salespeople must qualify a lead to become organization in a given
a prospect in terms of four basic criteria territory or area.
that can be remembered by the acronym N ■ Advertising
■ Advertising can use
A M E.
broadcast, interactive, or
print media.
Qualifying Criteria ■ E-mail and websites
● Need ■ This method involves
● Authority to buy sending e-mails and using
● Money to buy websites to look for leads.
● Eligibility to buy
● Accessibility ● Selective Lead Searching: Direct sources
● Profitability ○ This refers to systematic strategies
to generate leads from
IMPORTANCE OF PROSPECTING predetermined target markets.
● Prospecting, the initial stage, is necessary ○ friends, neighbors, and
for several reasons: acquaintances
● Firms need to increase total sales. ○ satisfied customers and former
● Customers switch to other suppliers.
● Customers’ businesses are taken over by customers
another company. ○ junior salespeople and sales
● Customers have only a one-time need for associates
the product. ○ professional sales organizations
● Relationships with some customers
deteriorate, and they stop buying from you. ○ mailing lists and directories
● Your buying contacts are promoted, ○ personal observation
demoted, transferred, or fired, or ○ centers of influence
they retire or resign.
○ spotters, or “bird dogs”
● Customers move out of your territory.
● Customers go out of business. ○ endless chain
● Customers die. ○ networking
○ Internet (e-mails)
LEAD SEARCHING METHOD ○ newsletters
● Random Lead searching ○ surveys
○ Sometimes called “blind” searching,
random-lead searching generates ● Selective Lead Searching: Indirect
leads by randomly calling on
sources
businesses.
○ Examples of random-lead searching ○ General announcements or calls to
include the following: potential markets are made, hoping
■ Door-to-door canvassing that prospects will come forward
and cold calls and identify themselves.
■ Territory blitz of ○ Examples of indirect sources of
organizations selective-lead searching include
■ A territory blitz refers to an these:
intensified version of door- ■ Postal or electronic sales
to-door canvassing in which letters
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■ Trade shows, fairs, and a. Prepare the prospect for the initial
exhibits sales call.
■ Professional seminars and b. Prepare the prospect for the initial
workshops sales call.
■ Contests c. Gather and analyze all relevant
■ Free gifts information about the prospect.
■ Unsolicited inquiries d. Identify the prospect’s problems and
■ Telemarketin for proposals. needs.
e. Identify the product features,
● Marketing library advantages, and benefits.
○ For prospecting or any other f. Choose the best sales presentation
stage in the PSP, Sales and strategy.
Marketing Executives g. Plan and rehearse your approach.
Marketing Library is an
outstanding source of Planning for the Sales Call:
information and help for Seven Steps to Pre-approach Success
salespeople. ● Prepare the prospect for the initial sales
○ The library offers the call.
following: ○ Use “seeding.”
■ more than 200,000 ● Sell the sales call appointment by
searchable articles prenotification.
on sales and ○ Sell the sales call appointment by
prenotification using the following
marketing
tools:
■ discussions by top
■ cold call
marketing/sales
■ e-mail
leaders about their
■ fax
latest strategies and
■ mail
ideas
■ telephone
■ access to the world’s
● Gather and analyze all relevant
first knowledge base
information about the prospect.
in sales and
○ Gather information on
marketing prospects such as this:
■ company and ■ The prospect’s name
industry profiles and its
■ the latest pronunciation
■ Job title
compensation data ■ Duties
for salespeople, ■ Superior
sales managers, and ■ Education
■ Work experience
marketing
■ Level of technical
managers, plus expertise
much more ■ Purchasing authority
■ Personality
■ Prospect’s family
➢ STEP 2: Planning for the Sales Call: Seven
■ After-work
Steps to Pre-approach Success activities, hobbies,
and interests
 10

■ Trade associations problems by skillfully observing,

■ Chambers of listening, and asking probing
commerce questions.
■ Credit bureaus ○ Most successful salespeople learn
■ Mailing list how to “flex” (adapt) their
companies communication styles in accordance
■ Government and with their prospects’ communication
public libraries styles.
■ Investment firms
● Plan and rehearse your approach.
● Gather information on prospects from ○ Rehearse, rehearse, rehearse until
websites, such as these: you have mastered your total sales
○ Thomas Register - presentation and feel comfortable
www.thomasnet.com and confident about it.
○ Yellow pages - ○ Do not memorize a canned spiel, but
www.yellowpages.com keep in mind the key points you
○ Fortune magazine - want to make in each of the stages
www.fortune.com of the selling process.
○ Forbes magazine - ○ Carefully planning, preparing, and
www.forbes.com rehearsing each sales call will spell
○ Inc. magazine - www.inc.com success.
○ U.S. Census Bureau -
www.census.gov ➢ STEP 3: Approaching The Prospect

● Identify the prospect’s problems and

needs Prospects Approaching Strategies
○ Problems, such as these: ● Non - Product Related Approach
○ products previously purchased ○ Self-introduction
○ production difficulties ○ Free gift or sample
○ productivity inefficiencies
○ Needs, such as these: ■ for example, free
○ increasing market share financial planning or
○ lowering cost of production lunch
● Identify the product features,
○ Mutual acquaintance or
advantages, and benefits (FAB).
○ Identify the features of the products reference
being considered for this sale. ○ Dramatic act
○ Enumerate the advantages of your ■ For example, setting
products relative to competitors’ carpet on fire to
products. show safety
○ Determine benefits to the prospect
of each ● Piquing-Interest Approaches
product feature and/or advantage. ○ Curiosity approach
(FAB information to be used in sales ■ for example, “Would
demonstration and presentation) you be interested in
learning about our
● Choose the best sales presentation high-tech steel
strategy. smelter that has a
○ Customer-oriented salespeople low carbon
footprint?”
identify and solve customer ○ Customer-benefit approach
 11

■ for example, “Our ○ Minimum objectives (lowest

computer will acceptable outcome)
increase employee ○ Optimal objectives (best possible
productivity.” outcome)
similar to F A B Setting S M A R T Objectives
● Specific: Establish a specific, major objective
● Consumer-Directed Approaches for the sales call.
○ Question
● Measurable: Ensure that your major
■ for example, “Can I
objective is measurable or quantifiable, for
be of any help?”
example, a certain number of units or dollar
(Best Buy)
sales volume.
■ “I am aware your ● Achievable: Make sure the goals you set are
company buys a lot realistic and achievable.
of steel. Would you ● Relational: Always try to develop a long-
be interested in our term relationship with the prospect even if
high-tensile steel?” the major objective on this sales call is not
○ Compliment or praise achieved.
● Temporal: If you can, establish with the
■ for example, “I read
about the award you prospect a specific timeframe for achieving
recently received in the major objective.
the Star-Ledger.
Congrats!!!” Over All Sales Objectives
○ Survey ● Generate sales
■ for example, movers, ● Develop the market - find new customers
home insurance, and ● Protect the market - retain current
security systems customers
■ environmental
remediation costs ● STEP 4: The Sales Presentation And
based on amount of
clean-up Demonstration
● Ask qualifying questions to uncover needs.
● Product - Related Approaches ● Present products and services that will
○ Product demonstration satisfy needs.
■ for example, ● Stimulate desire for offerings with the
demonstrate product demonstration.
or statistical
● Highlight their features, advantages, and
software for CRM or
data mining benefits:
○ Product or ingredient ○ Features are the obvious
■ for example, carry characteristics of the product.
sample or catalog ○ Advantages are the performance
show product traits of the product that show how
it can be used to help the customer
Establishing Call Sales Objectives better solve a problem than present
● When establishing objectives for a sales products can.
call, set these objectives: ○ Benefits are what the customer
○ Primary objectives (targeted wants from the product.
outcome)
The FAB Approach
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● Features - identify features of the product matched with the appropriate prospect in a
● Advantages - enumerate the advantages designated sales situation.
relative to the competitors’ products
● Benefits - identify the benefits of the ➢ STEP 5: Negotiating Sales Resistance or
products to the prospect
Objections
Sales Presentation Strategy ● Objections are statements,
● Several alternative sales presentations, questions, or actions by the
include these: prospect that indicate resistance or
○ Stimulus-response - A salesperson an unwillingness to buy . . . at least
using stimulus-response asks a at the moment.
● Without sales resistance, there
series of positive leading questions.
wouldn't be any need for
○ Formula -A salesperson using a
salespeople.
formula leads the prospect through
○ The first person who reached
the mental states of buying
the prospect would make
(attention, interest, desire, and
the sale.
action).
○ Serious negotiations seldom
○ Need satisfaction - A salesperson
begin until the prospect's
using need satisfaction tries to find
objections surface.
dominant buying needs.
○ Consultative problem solving -
Forms of objections
Most successful sales presentation
strategies do the following: focus on ● Valid objections - sincere concerns that
the prospect's problems, not the the prospect needs answered before making
seller's products emphasize the the commitment to buy
partnership of buyer and seller and ○ Product objections
stresses "win-win" outcomes in ○ Price objections
negotiations ○ Promotion objections
○ Depth selling - Depth selling ○ Distrubution objections
employs a combination of several
○ Capital objections
sales presentation methods.
○ Source objections
○ Team selling - Team selling
○ Needs objections
involves a presentation made to a
group of decision makers from ● Invalid objections - used by prospects to
different functional areas. stall the sales process/irrelevant,
untruthful, delaying, or latent reasons
Adaptive Versus Canned Sales Presentations negotiate
● Adaptive selling - Adaptive selling ○ Latent objections
stresses the adaptation of each sales ○ Stalling objection
presentation and demonstration to fit each ○ Time objections
individual prospect. ○ Unethical objections
● Canned selling - Canned selling is any
Specific techniques for negotiating buyer
highly structured or patterned selling
approach.
objections
● Both adaptive and canned sales ● Put Off Strategies
presentations can be effective when

○ I’m coming to that: Put off things
like price until the end so you don’t
turn off the prospect early.
○ Pass-off: Keep a pleasant
expression but say nothing.
● Switch Focus Strategies
○ Alternative product: Switch focus to
another model.
○ Feel, felt, found: Trace own
experience with product.
○ Comparison or contrast: Compare
product with another.
○ Answer with a question: What do
you think?
○ Humor: Use lighthearted humor to
ease tension and redirect the focus.
○ Agree and neutralize: Give some
level of agreement, then explain
benefit.
● Offset strategies
○ Compensation or counterbalance:
Counter an objection that cannot be
denied by citing an even more
important buying benefit.
○ Boomerang: Turn the objection into
a reason for buying.
● Denial Strategies
○ Indirect denial: Agree with
prospect’s objection but follow with
a disclaimer.
○ Direct denial: Tackle the false rumor
head-on.
● Provide Proof Strategies
○ Case history: Tell experience of a
satisfied customer.
○ Demonstration: Dramatize major
advantages and benefits.
○ Propose trial use: Offer free trial
use.
➢ STEP 6: Confirming and Closing The Sale
● The more closing strategies the salesperson
knows and can effectively apply, the
greater his or her chances for closing the
sale.
13
● Five widely used closing techniques
include these:
○ Clarification closes
■ Assumptive close - Assume
that the purchase decision
has already been made so
that the prospect feels
compelled to buy.
■ Choice close - Offer the
prospect alternative
products form which to
choose.
■ Counterbalance close -
Offset an objection that
cannot be denied by
balancing it with an
important buying benefit.
■ Success story close - Tell a
story about a customer with
a similar problem who
solved it by buying the
product.
■ Contingent close - Get the
prospect to agree to buy if
the salesperson can
demonstrate the benefits
promised.
■ Boomerang close - Turn an
objection around so that it
becomes a reason for
buying.
■ Future order close - If a
prospect does not have a
current need, but may have
one in the future, the
salesperson can ask for a
commitment from the
prospect to purchase at a
future time.
■ If-when close -Ask the
prospect to provide a
clarification as to when an
order will be placed, as
opposed to if an order will
be placed.
■ Probability close -
Although similar to the “if-

when close” described
above, the probability
closing technique asks the
prospect to assign a
quantified likelihood of
signing a sales contract in
the near future . while still stressing a sense
■ Suggestion close - Imply
that the prospect should
accept the salesperson’s
suggestion to buy without
giving it a great deal of
thought. A salesperson, for
example, might state that
customers who have
purchased the product have
reported high levels of
satisfaction, therefore the
prospect should purchase it
also.
○ Psychologically oriented closes
■ Stimulus-reponse close -
Use a sequence of leading
questions to make it easier
for the prospect to say “yes”
when finally asked for the
order.
■ Minor point close - Obtain
favorable decisions on
several minor points leading
to eventual purchase
decision.
■ Standing-room only close
- Suggest that the
opportunity to buy is brief
because demand is great
and the product is in short
supply.
■ Impending event close -
Warn the prospect about
○ Straightforward closes
some upcoming event that
makes it more
advantageous to buy now.
14
■ Advantage close - This
variation of the impending
event close emphasizes the
specific advantages of
making a timely decision,
of immediacy.
■ Reserve advantage close -
In this slight variation of the
advantage close described
above, salespeople identify
a number of merits for
purchasing a product, but
save a few to use if the
prospect exhibits resistance
yet again.
■ Puppy dog close - Let the
prospect take the product
home for a while and, as
with a puppy, an emotional
attachment may develop,
leading to purchase
■ Compliment close -
Commend prospects for
raising interesting and
intelligent questions, which
subtly flatters their egos,
then ask them to sign the
sales order.
■ Dependency close - Used to
break the “choke-hold” that
a competing firm has over a
prospect’s business by
suggesting that the prospect
have an alternative supplier
to reduce the risk of being
dependent on one supplier.
■ Ask for the order close -
Ask for the order directly or
indirectly.

■ Order form close - While
asking the prospect a series
of questions, start filling out
basic information on the
contract or order blank, then
hand the order form and a
pen to the prospect.
■ Summary close-
Summarize the advantages
and disadvantages of
buying the product before
asking for the order.
■ Repeated “yes” close - This
variation of the summary
close requires a salesperson
to pose several leading
questions to which the
prospect has little choice but
to respond in an affirmative
manner.
■ Benefits close - Also a
variation of the summary
close, it requires the
salesperson to identify and
present a synopsis of the
various salient benefits that
the sales solution offers.
■ Action close - The
salesperson simply hands
the prospect a pen along
with the contract, and
frequently the prospect,
almost by reflex, will sign.
■ Negotiation close - The
salesperson more forcefully
and effectively summarizes
key value-added benefits for
the prospect by using
technologies such as
PowerPoint, Excel, or other
multimedia tools.
○ Concession closes
15
■ Special-deal close - Offer a
special incentive to
encourage the prospect to
buy now.
■ No-risk close - Agree to
take the product back and
refund the customer's
money if the product doesn't
prove satisfactory.
■ Management close - When
salespeople do not have the
authority to make the
prospect’s requested
commitments or
concessions, they can elicit
the assistance of a senior
sales manager who has the
authority to make the
necessary decisions to close
the no-risk close sale.
■ Takeaway close - This
close is used as an
emotional fear appeal to
cause anxiety that the
prospect may lose out on a
special deal or incentive. A
salesperson may suggest
that the special offer to
provide an ancillary product
or service free of charge is
available only for another
week, thereby evoking an
immediate purchase.
○ Lost sale closes
■ Turnover closes - Turn the
prospect over to another
salesperson with a fresh
approach or better chance to
make the sale.
■ Pretend-to-leave close -
Start to walk away, then
"remember" another benefit

or special offer after the
prospect has relaxed his or
her sales defenses.
■ Ask for help close - When
the sale seems lost,
apologize for not being able
to satisfy the prospect and
ask what it would have
taken to get him or her to
buy; then offer that.
➢ STEP 7: Following up and Servicing the
account
● To maximize customer satisfaction after a
sale, salespeople should consider the
following basic service strategies:
● Express appreciation for the customer's
business.
● Make sure products are delivered and
installed on time.
● Assist customers with credit arrangements.
● Help customers with warranty or service
contracts.
● After making the sale, top salespeople don’t
disappear.
● Maintain close contact with the customer to
handle any complaints.
● It’s less costly to keep present customers
satisfied than to search out and acquire
new customers.
● Frequent and comprehensive follow-up is a
primary means of retaining long-run,
satisfied, loyal, and profitable customers.
● Follow-up keeps the personal selling
process wheel revolving.
Handling customer complaints
● Some guidelines for handling customer
complaints are as follows:
● Anticipate customer complaints and resolve
them before the customer expresses them.
● Listen closely and patiently to the
customers' complaint without interrupting.
● Never belittle a customer's complaint.
16
● Encourage customers to talk and fully
express their feelings.
● Never argue with customers or take their
complaints personally.
● Record the facts as the customer sees them.
● Let customers know you understand their
complaints.
● Empathize with the customer and see the
problem from his or her viewpoint.
● Don't make excuses for service problems or
criticize service personnel.
● Resolve problems quickly and fairly even if
that means the sale will become
unprofitable.
● Reassure customers that you will resolve
their problems promptly and get back to
them regularly to report progress.
● Thank customers for voicing their
complaint.
● Follow up after the customer's complaint
has been resolved to make sure that
everything is okay.
● Keep a record of all customer complaints
and their outcomes.
WEEK 5
Managing your Time and Territory
SELF-MANAGEMENT - Self-management is
probably more difficult than management by
someone else where feedback from various sources
can keep you on track and motivated.
Effectiveness and Efficiency
● Effectiveness is results-oriented and focuses
on achieving goals, while efficiency is cost-
oriented and focuses on making the best
possible use of the salesperson's time and
efforts
● Together, the two equal success:
E1 (Effectiveness) + E2 (Efficiency) = S1
(Sales Success)
● Successful salespeople tend to
possess the following
characteristics:

○ Possess excellent
○ product knowledge
○ knowledge of competitors
○ face-to-face selling skills
○ Exercise the influence skills
needed to work with both
internal staff and customers
○ Recognize that the skills
required to service an
account are different from
those required to make a
sale
How Sales People Spends Their Time
● A recent study of 10,000 sales reps shows
that:
○ 33% of their time is spent in face-
to-face selling
○ 20% in travel
○ 16% in phone selling
○ 16% in account service and
coordination
○ 10% in administration
○ 5% at internal company meetings
Sales activities
● Basic sales activities include:
○ the selling process - search out
leads; prepare sales presentation;
make sales calls;negotiate
resistance
○ working with orders -process
orders; expedite orders; handling
shipping problems
○ servicing the product - test
equipment; provide training;
supervise installation
○ managing information - expectations on them.
disseminate and gather information
from customers; provide feedback to
employers
17
○ servicing the account - take
inventory; set-up a point-of-
purchase displays; stock shelves
○ conferences/meetings -
attend
sales marketing; set-up and staff
exhibit and trade shows
○ training/recruiting - recruuit new
sales reps; train new sales rep
○ entertaining customers - take
clients to dinner, golfing, to stage
plays
○ out-of-town traveling - travel
overnight to sales appointment
○ working with distributors -
establish and maintain relationship
with distributors; extend credit;
collect past-due accounts
Whats your job description?
● Each salesperson needs to know exactly
what performance is expected in his or her
specific job assignment
● In addition, the salesperson needs to know
what is expected to be achieved during a
given time period.
Sales people as field marketing managers
● For many companies, the modern
professional selling job has evolved into
that of field marketing manager for a sales
territory.
● Today's salespeople have more
responsibilities than ever before.
● They are their own bosses in their sales
territories, working with groups of people
over whom they have little control and
often impose conflicting demands and
Management activities

● Problem analysis - analyzing customer
problemscan be solved by the salesperson’s
product or services.
● Objective setting -establishing sales
volume, market share, and customer service
levels needed in a territory to ensure a
strong competitive position.
● Financial analysis - evaluating the impact
a customer’s purchase will have on that
customer’s financial health.
● Supervison and coordination - working
with others in the salesperson’s own firm to
answer questions, supply information, to
prospects, provide customer service, and
coordinate efforts of a company selling
team.
● Training - educating buyers in the proper
and productive use of products sold by the
salesperson.
● Controlling - reviewing time allocationto
different prospects, customers, territories,
and various tasks to determine how to
become productive.
● Research - investigating prospect and
customer needs and recommending product
changes or new product ideas.
● Market analysis - determining the size and
needsof various market segment.
Continually searching for new market
opportunities.
● Sales forecasting - predicting sales
volume for different customer groups and
individual accounts to help allocate selling
time.
● Buyer behavior - studying the buying
process to become more effective in
adjusting to different motivational and
behavioral needs of prospect and
customers.
● Marketing strategy - understanding the
overall marketing strategy of customers in
order to assesthe impact of purchases on
18
their inventory, distribution, product
development, pricing, sales, and profit.
Helping customers profitably “sell through”
to their customers.
● Information systems - using
telecommunications technology to supply
and access data needed in the
salesperson’scompetitive efforts as the
interface between buyers or sellers.
Return on time invested (ROTI)
● Although ROTI sounds like tedious record
keeping, it only takes a few minutes a day
● ROTI calculations can help salespeople
manage their time more effectively and
efficiently
3 Axiom’s in Personal Selling
● Parkinson's Law - Work tends to expand to
fill the time allotted for its completion.
● Concentration Principle ("80-20" rule) -
805 of the sales and profits come from 20%
of customers.
● Iceberg Principle - Analogous to an
iceberg, which shows only 10% of its mass
above the water, many sales problems can
remain hidden beneath the surface of
overall positive sales totals.
Performance measure
● Instead of reliance on one performance
measure such as sales volume, a balance of
several quantitative and qualitative
standards is better because performance in
one area can conflict with performance in
another.
● For example, a salesperson who stresses
keeping sales and service expenses low may
find revenues adversely affected.
● Quantitative measures
○ Like dollar or unit sales volume or
net profit, affect sales or expenses
directly, and can usually be
measured objectively.
● Qualitative measures

○ Like the salesperson's product
knowledge, customer relationships,
or ethical behavior, have a more
indirect and longer-run impact on
sales and expenses, and thus must
be evaluated on a more subjective
basis. From the standpoint of
customers, qualitative measures are
more important than quantitative.
● Derived from sales forecasts, sales quotas
are performance objectives and motivation
incentives for salespeople. The four types
of quotas for salespeople are:
○ Sales volume
○ Financial
○ Activity
○ Combination
Performance measure: customer reviews of
preformances
● Obtaining feedback from customers is one
of the most effective ways to keep from
losing touch with customers
● makes calls in one direction until he
● Salespeople should ask for an annual
evaluation of their performance by
customers and participate in this review
process at a special meeting
Account and territory management
● A sales territory is a control unit that
contains customer accounts.
● Once the geographical control unit has been
established, the next step is to analyze the
customers and prospects in the territory on
the basis of their sales potential.
● Increasing numbers of companies are using
computer programs to assist their
salespeople in account analysis, planning,
and control.
Portfolio Analysis
19
● A portfolio analysis approach provides an
alternative to the analytical rigor of the
mathematical models.
● In this approach, the sales call strategy is
based on the account’s attractiveness.
● Account attractiveness depends on two
dimensions:
○ Account opportunity
○ Strength of position
Territorial routing
● Territorial routing is devising a plan or
pattern to use when making sales calls.
● Before developing a routing plan, the
salesperson must determine:
○ the number of calls to be made each
day
○ the call frequency on each class of
customer
○ the distance to each account
○ the method of transportation
Routing patterns
● Straight-line route
○ salesperson starts at the office and
or she reaches the end of the
territory.
● Circular patterns
○ salesperson starts at the office and
moves in a circle of stops until
ending up back at the office
● Cloverleaf route
○ similar to a circular pattern
○ rather than covering an entire
territory, the route circles only part
of a territory
○ the next trip is an adjacent circle,
and the pattern continues until the
entire territory is covered
● Hopscotch pattern
○ the salesperson starts at the
farthest point from the office and
hops back and forth calling on

accounts on either side of a straight
line back to the office
● The "outer-ring" approach
○ the salesperson first draws an outer
ring around the customers to be
called upon
○ then, those customers inside the
ring are connected to the outer ring
route using angles that are as
obtuse as possible
Using computer in programs routing
● Numerous computer-based interactive
models have been successfully applied to
sales force routing and territory
management.
Working smarter: Using latest technology
● Salespeople can work smarter and increase
their selling effectiveness and efficiency by
making use of the latest technologies, such
as: electronic pagers, cellular car phones,
electronic mail, facsimile machines, word
processing and spreadsheet software, time
management software, laptop computer
Working smarter: Excuses about time
● Often the problem is the individual's
attitude toward time and the tendency to
make excuses for using it inefficiently
○ Insufficient time
○ Too many demands on my time
○ I can’t find time to work on big
projects
○ Unexpected problems disrupt my
plans
○ If only i could work faster
○ It’s better to do small task first
Working smarter: Paperwork
● One of the most dreaded and time-
consuming tasks of salespeople is handling
their paperwork.
● Like other sales-related activities,
paperwork ought to be scheduled on the
20
salesperson’s daily or weekly planning
calendar.
● Some companies put the 200 to 700 pages
of memos, newsletters, brochures, reports,
announcements, and other sales-related
materials sent to salespeople each week
onto audiotapes.
Working smarter: Customer Service
● Customer service is a regular part of the
salesperson’s daily job and should be
scheduled like any other activity.
● The suggestions on the following slides may
assist you in focusing your customer service
activities:
● Segment your customers according to costs
and the potential profits that could accrue
from providing them with superior service.
● Remember that all customer contacts,
whether through telephone operators,
receptionists, secretaries, delivery and
repair personnel, or customer service
people, shape the perceptions of your
company’s service.
● Try to encourage all these people with
customer contact to treat prospects and
customers well.
● Continually stress the importance of
customer service to people in your
company, and reinforce this attitude by
your own actions.
● Design and use measures of service
effectiveness such as the percentage of on-
time deliveries, the length of time it takes
to repair a product, and the level of
customer satisfaction.
Working smarter: Time traps
● Many salespeople hurt their efficiency by
falling into daily time traps, which include:
○ Calling on unqualified or
unprofitable prospects
○ Insufficiently planning each day's
activities

○ Making poor territorial routing and
travel plans
○ Making too many cold calls
○ Making poor use of waiting time
between appointments
○ Spending too much time
entertaining prospects and
customers
○ Not using modern
telecommunications equipment like
a car phone, beeper, facsimile
machine, and laptop computer
○ Doing tasks that could be delegated
to a staff person or to automated
equipment
○ Failing to prioritize work
○ Procrastinating on major projects or
contacting high-potential prospects,
resulting in redundant preparation
and paperwork
○ Inefficiently handling paperwork
and keeping disorganized records
○ Failing to break up huge, long-
range goals into small, currently
manageable tasks
○ Ending workdays early, especially
on Friday afternoons
○ Failing to insulate oneself from
interruptions on sales calls or while
doing paperwork
○ Conducting unnecessary meetings,
visits, and phone calls
○ Doing personal business during
working hours
Working smarter: A plan for each day
● Every salesperson can benefit from
preparing a daily "To Do" list of projects
and tasks that are prioritized into A, B, and
C categories of importance
● Use the Swiss cheese approach to punch
little holes in top priority projects that can't
be finished all at once
21
Working smarter: Steps to manage time
efficiently
● Each weekday afternoon, write down the
schedule for the next day
● On Friday afternoon, plan the schedule for
the following week
● Concentrate on high priorities
● Spend time as if it were money
● Stop procrastinating
● Schedule some personal time every day
HRES
The Environment of Human Resource
Management
Week 1
A. THE IMPORTANCE OF HUMAN RESOURCE
FROM THE PERSPECTIVE OF A CHIEF EXECUTIVE
MENTOR’S PERSPECTIVE
● MERALCO – MANUEL PANGILINAN
Our people are the true source of power.
They have been the key in MERALCO’s
unprecedented growth, and our partners in nation-
building. They embody our corporate values which
reflect the best of the past and what it takes to
succeed in the future.
● METROBANK Mission/Vision Statement
We realize that success depends on the
quality of our people, the efficiency of our
systems, and the strength of our
organization. Hence, we shall continuously
invest in our human resources to ensure a
service force characterized by the highest
standards of dignity, probity, and
professionalism.
● AYALA PROPERTY MANAGEMENT
CORPORATION
We recognize that our employees
are the principal assets of the company. As
such, we focus on their training needs,
inculcate the values of professionalism,
integrity and teamwork, provide career

opportunities, and reward outstanding
performance.
● NISSAN MOTOR PHILIPPINES
We value our people. Employees are
at the heart of the company. Having chosen
personnel with commitment to the highest
standards, through teamwork, we aim to
create corporate understanding and loyalty
to one another.
B.WHAT IS HUMAN RESOURCE MANAGEMENT
(HRM)?
● HRM is the systematic planning,
development, and control of a network of
interrelated processes affecting and
involving all members of the organization.
● HRM is the process of acquiring, training,
appraising, and compensating employees,
and attending to their labor relations,
health, safety and fairness concerns.
● HRM is designing management systems to
ensure that human talent is used effectively
and efficiently to accomplish organizational
goals.
**WALMART - called their HR Department as “THE
PEOPLE DIVISION” – where they can accomplish
their 7 overriding strategies : price, operations,
culture, key item/products, expenses, talent and
service by aligning their HR practices with their
business strategies.
C. MAJOR FUNCTIONS OF HRM
● TALENT ACQUISITION – workforce
planning and employment (recruitment and
selection) Workforce focuses on assessing
the organization’s human resource needs.
Employment includes recruitment and
selection of individuals to fill vacant
positions. Recruitment is designed to attract
qualified applicants to the organization.
Selection is the process of choosing the best
22
qualified applicants to fill open positions in
the organization.
● PERFORMANCE MANAGEMENT – process of
ensuring that employees’ performance
contributes to realizing the organization’s
goals and objectives. The managers monitor
the employees and ensure that appropriate
tools are made available by managers to
the employees so that the latter can meet
expected levels of performance.
● EMPLOYEE TRAINING AND MANAGEMENT
DEVELOPMENT – Employee training refers
to the process of providing employees with
specific knowledge and skills they need to
perform in their jobs. Management
development represents activities designed
to improve employee’s capabilities beyond
those required by their current jobs.
● COMPENSATION MANAGEMENT –
management of financial returns that
employees receive in exchange for services
that they provide to an organization.
● BENEFITS MANAGEMENT – process by which
employee benefits, generally compensation
outside of the basic pay, are designed and
given to employees in accordance with legal
as well as organizational requirements.
● EMPLOYEE RELATIONS MANAGEMENT- the
process of ensuring effective management
of all interactions and relations between
the organization and its employees. The HR
acts as employee champion – deals with the
day to day problems, needs and concerns of
employees, promoting their well-being and
building their capabilities and commitment.
● LABOR MANAGEMENT RELATIONS - refers to
the functions of HR that pertains to the
management of employee’s terms and
conditions of employment. Interpretation of
the CBA between labor and management.
Concerns on employee grievances and
discipline issues.
THEORETICAL BASES
● SCIENTIFIC MANAGEMENT – Friedrich Taylor
– Father of Scientific Management
● HAWTHORNE STUDIES - Elton Mayo –
Western Electric Company- Working
Conditions – Production –
Socialization/Teamwork

● CAPITALISM – Profit – without due regard to
the rights of female workers, children and
elderly
● INDUSTRIAL REVOLUTION – machines –
lesser human intervention –
D. STRATEGIC VIEW OF HRM
STRATEGIC HRM (SHRM) – a pattern of planned
human resource deployments and activities
intended to enable an organization to achieve its
goals.
● (a) Alignment of HRM activities with the
organization’s goals, strategies and
objectives; (b) effective interrelations
among the HRM functions, instead of each
function standing alone; (c) use of the
systems approach in demonstrating the
strategic role of HRM.
● SHRM is an attempt to understand and
identify possible connections between HR
programs and an organization’s strategies
and business performance
● Distinctive HR practices help to create
unique competencies that differentiate
products and services and, in turn, drive
competitiveness.
SPECIFIC CHARACTERISTICS OF THE INTERNAL
RESOURCE OF A FIRM THAT ARE
INSTRUMENTAL IN CONTRIBUTING TO THE
ORGANIZATION’S BUSINESS PERFORMANCE:
● Employees who possess specific skills which
are required to successfully implement an
organization’s strategic intiatives;
● Behaviors or attitudes of individuals which
constitute an organization’s competitive
edge and are not easily copied by others;
● Employees who demonstrate discretionary
behaviors which are critical in creating an
organization;s competitive advantage.
CHANGING LANDSCAPES OF HRM
23
TRANSFORMATIONS AS REFLECTIONS OF THE
CHANGING ROLES OF HRM:
From personnel management to human resource
management – under personnel management or
administration the focus is on ensuring that policies
and procedures were implemented efficiently and
changes in personnel status were appropriately
processed and documented. Traditional functions –
record –keeping, processing of new employees,
payroll, employee benefits administration.
***from administration to management
While HRM's important role was monitoring or
policing the activities of line managers to make
certain that they complied with organizational
policies and procedures as well as legal
requirements. More concerned with developing and
implementing programs that focus on talent
acquisition and management ensuring that
qualified HR are acquired, motivated, and
developed in order to realize the organization’s
goals and objectives.
From the HRM department to the Human Capital
Management Department – HRM is expected to
contribute to realizing the organization’s business
strategies.
TRADITIONAL FUNCTIONS ARE ASSIGNED TO
OUTSOURCE
HR PRACTIONERS HAVE DIFFERENT ROLES : Policy
enforcer; change facilitator; employee advocate;
negotiator; legal adviser; strategic partner; coach;
party planner, counsellor, terminator and mediator
4 KEY ROLES OF HR LEADERS
● STRATEGIC PARTNER: Management of
SHRM – this role makes certain that HR
strategies, programs and activities are

delivered in order to support the
organization’s strategies
● ADMINISTRATIVE EXPERT: Management of
firm’s infrastructure – this role focuses on
delivering efficient HR processes
● EMPLOYEE CHAMPION: Management of
employee’s contribution – this to day
problems and needs of employees. It
ensures employee’s commitment or
engagement in the organization.
● CHANGE AGENT: this role enables the HR
practitioners to identify and implement
processes for change. The HR practitioners
build an organization’s capacity for change.
6 NEW ROLES OF EFFECTIVE HR PROFESSIONALS IN
HIGH PERFORMING ORGANIZATIONS
● CREDIBLE ACTIVISTS – refers to HR
Practitioners ‘ need to deliver what they say
they will do and to “walk the talk”. HR
practitioners will gain the trust and respect
of the organization’s members.
● STRATEGIC POSITIONER - understand the
organization’s internal and externAl
environments and anticipate what is
needed by the organization, participate in
developing, strategic initiatives and align
programs with the organization’s
strategies.
● CAPABILITY BUILDER – identify the required
“organizational capabilities” and take
initiative to build them through training
and development, reward’s systems and
other HR programs and practices in an
integrated way to ensure the organization’s
sustainability.
● CHANGE CHAMPION - HR practitioners build
organizational capability for managing
change, and provide tools to enable the
organization to undertake the needed
change effectively.
● HUMAN RESOURCE INNOVATOR AND
INTEGRATOR – HR practitioners identify and
plan required changes and integrate HR
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initiatives and activities to ensure that
planned changes are effectively and
efficiently carried out.
● TECHNOLOGY PROPONENT – one of the
focuses of HR’s ability is to use the “social
networking technology” to get potential
employees, employees, retirees, and other
significant stakeholders to “stay connected
with one another”. HR's role is necessary to
ensure that customer’s perspectives are
understood.
Week 2
Workforce Planning And Recruitment
● PLANNING - It is essential in order to know
the number of positions that organization
needs in the short or even long term and
the skills and competencies required for
these positions.
● FINDING THE RIGHT NUMBER OF PEOPLE
FOR THE RIGHT POSITION AND FOR THE
RIGHT TIME. - It signals the HR practitioner
to be prepared to assess the supply side of
the organization’; to determine the gaps in
HR, and to conduct internal as well as
external recruitment.
● WORKFORCE PLANNING - Deciding on which
person will make the best fit in an
organization starts with knowing the right
kind of people needed by the organization
to enable it to succeed. Roadmap to
Workforce planning = Right people – Right
skills – Right Place – Right Time- Right Cost
It provides the organization with a guide to
make staffing decisions such as promotions
and all other movements that relates to
getting people into, around and/or out of
an organization.
The over-all objective of workforce planning is to
define the right profile of the people an
organization requires to meet its short term and

long term plans and goals. It is a process of
identifying and addressing the staffing implications
and business strategies and plans and the changes
happening within and outside the organization.
The process of workforce planning helps the
organization identifies the “right” kind of people
and the “right” number of people needed b the
organization for the present and for the future
while taking into consideration its plans, available
resources, mission, as well as the internal and
external (economic, social and political )
environments.
Plantilla or hierarchy, categories of positions,
SCOPE OF WORKFORCE PLANNING
Workforce planning can be performed at various
levels of an organization. Planning can be done for
an entire organization, a division, or section within
the organization, a set of units or workgroups, or
even for a single unit within a company.
FORMAL OR INFORMAL PLANNING
INTERNAL CHANGES within an organization
can prompt the need for changes in the staffing
profile through the rightsizing, re-training or re-
tooling. Example of internal changes that impact
the kind and number of people:
a. company expansion
b. financial difficulties, company
downsizing, or closure
c. company relocation
d. company mergers
e. changes in technology or production /
work systems or streamlining systems
f. new product lines or services offered
g. increased targets for production, sales,
services,, etc.
EXTERNAL CHANGES
a. political or economic environment is
beset with problems
b. when the organization competes or
operates with new players or competitors
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c. when there are changes in the labor
markets, i.e., introduction of new labor laws or
standards.
STEPS IN WORKFORCE PLANNING
a. Situational analysis or environmental scanning
b. Forecasting demand
c. Analysis of the supply of human resources
d. Development of plans for action
● SITUATIONAL ANALYSIS - review of the
environment in which the organization
operates and of identifying/focusing on
current and anticipated factors in the
internal environment that may affect the
organization. The internal scan include the
examination of the history and past
experience of the organization such as the
trends in the growth or decline as a
company, employee turnover rates, track
record in employing and retaining good
workers, changes in leadership, its use of
technology. The environmental scan
involves examining relevant aspects of the
external environment such as the economy
of the country it operates in, the political
climate, and the regulatory and
demographic factors.
○ SWOT ANALYSIS OR SITUATIONAL
ANALYSIS - it involves internal and
external environment; the SWOT
ANALYSIS framework categorizes
and labels internal aspects of the
organization as strengths and
weaknesses and external situational
factors as either opportunities or
threats.Through the SWOT, an
organization able to identify both
positive and negative factors that
influence its success from within or
outside the organization. The
advantage of doing a SWOT is that
it helps the organization develop a
full awareness of major factors that

may affect the organization’s ability
to attain its goals.
● FORECASTING DEMAND – After making the
SWOT, the HR practitioner begins to map
out certain details of the manpower plan.
One can make a projection of how many
people are needed by the organization and
what qualities and competencies these
people must possess in order to realize the
plans of the organization. This process
which identifies the number and kind of
people that an organization will need at
some point in the future is known as
DEMAND FORECASTING.
○ QUANTITATIVE FORECASTING
APPROACHES
■ HISTORICAL RATIO ANALYSIS
– examination or analysis of
the relationship between 2
quantitative or numerical
factors which have direct
impact on the success of the
organization. The particular
relationship that is
examined between these
two factors is that of a ratio
(proportion of one factor
measured against the other
factor).
■ TREND ANALYSIS – is quite
similar to ratio analysis – it
examines the changes in an
organization’s staffing
levels over a period of time
and determines a patter or
trend in these changes when
they are compared with
changes in the levels of key
performance or financial
metrics of the organization.
■ STATISTICAL ANALYSIS – it
consists of studying sets of
complex interrelationships
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of various factors related to
the business of the
organization such as
production time, sales
volume, turnover rates,
retirement rates, growth
rate, net profit on the
manpower needs. In
statistical analysis, the HR
practitioner normally use a
computer software to do the
forecasting.
○ QUALITATIVE FORECASTING
APPROACHES – based on expert’s
experience, sound judgment and
conclusions derived from existing
information or knowledge about
organizational plans.
■ EXPERT FORECAST – in this
method, managers estimate
future HR requirements
based on their past
experiences, judgment, and
knowledge about the
organization’s future and its
anticipated manpower
needs. Since the managers
are knowledgeable about
organizational plans, they
are in a good position to
make predictions about the
staffing levels that are
needed to attain these
goals.
■ DELPHI TECHNIQUE- since
Managers are experts within
the organization who are in
the best position to project
the needed profile of people
needed for the
organization, the DELPHI
technique, aims to improve
the objectivity of expert

forecasts. This method
involves a group of pre
selected individuals and
getting their inputs on
future manpower levels and
then consolidating their
projections. This technique
sometimes uses a “bottom
up” approach to gathering
and consolidating staffing
projections from “experts”
within the organization,
such as lower-level
managers, and then
transmitting these
projections “upwards” in the
organization for the
confirmation of higher
levelsof management.
C. ANALYSIS OF THE SUPPLY OF HR –
● INTERNAL SUPPLY – analysis of the internal
supply of HR is to make an inventory of the
manpower available in the organizations,
number and quality of people available in
the organization (education, training,
experience, job performance, age, years of
service in the organization). Making also of
skills inventory – which is a summary of the
skills and abilities of employees, especially
of those who are considered critical for the
organization’s success.
○ SUCCESSION ANALYSIS - (1) making
a detailed inventory of how many
people are currently in various job
categories or have specific skills
within the organization; (2) making
an analysis of the expected
movements and changes in the
inventory as a result of retirements,
promotions, transfers, voluntary
turnovers and terminations.
○ MARKOV ANALYSIS - is usually
expressed in terms of statistical
27
probability; it shows the internal
flow of human resources.
● EXTERNAL SUPPLY – speaks of availability
of people outside the organization
D. DEVELOPMENT OF PLANS OF ACTION –the final
step in planning involves consolidating all of the
data and inputs and determining the most effective
strategy to close the gap and achieve the desired
manpower profile. The HR Planner must identify
the right number and profile of people needed by
the organization in various positions at the
specified time in the future. Along with this is the
qualitative and quantitative projections as well as
the chosen strategies to reach the projections
(example of strategies: acquiring manpower
externally; internally through promotions, lateral
transfer; renting talents/outsourcing services;
flexible working hours, increasing or decreasing
work overtime; retirement or exit programs)
JOB ANALYSIS
Job - maybe defined as a “collection or aggregation
of task, duties, and responsibilities which as a
whole, are regarded as a regular assignment to
individual employees”
Job Analysis - Edwin Flippo, “job analysis is the
process of sudying and collecting information
relating to the operations and responsibility of a
specific job.”
- Is a systematic analysis of each job
for the purpose of collecting
information as to what the job
holder does, under what
circumstances it is peformed and
what qualifications are required for
doing the job.
Uses of Job Analysis
● Human Resource Planning
● Recruitment
● Selection of Personnel
● Training and Development
● Organization Audit
 28

● Job Evaluation ● Physical fitness

● Job Design ● Special qualities required for performing
● Performance Appraisal the job
● Career Planning ● Intelligence, judgement, and initative
● Safety And Health
required for performing the job
Job Description - the preparation of job
description is necessary before a vacancy is
RECRUITMENT refers to the organizational
advertised. It tells in brief the nature of job. Inother
activities that influence the number and types of
words, it emohasizes the job requirements.
applicants who apply for a job and whether the
applicants accept the jobs that are offered.
The details given in job description
● Job title
METHODS OF RECRUITMENT
● Organizational location of the job
● Supervison given and received
EXTERNAL RECRUITMENT – includes the actions
● Materials, machinery and equipments work
intended to bring a job opening to the attention of
with
potential candidates outside the organization and
● Desigantion of the immediate superiors and
to influence whether these candidates apply;
subbordinates
maintain interest and, in the end, accept a job
● Salary levels: Pay, DA, other allowances,
offer. War of Talents
bonus, incentive wages, method payment,
hours of work shift, break, etc.
INTERNAL RECRUITMENT – is done when people
● Definition of duties to be performed
within the organization are sourced as possible
separated according to daily, weekly,
candidates for new or vacant positions. It can
monthly and casual, estimated time to be
company initiated or employee initiated. If
spent on each day.
company initiated – promotion or offers the
● Definition of unusal terms
position . If employee initiated – the employee
● Conditons of work: location, time, speed of
applies for the position.
work, accuracy, health hazards, accident
hazards.
1. Job advertising
● Training and development facilities
2. Internet posting – company websites; online job
● Promotional chances and channels
boards; use of social media
3. Headhunting or executive search firms
Job Specification - Edwin Flippo, “job specification
4. Employee referrals
is a statement of minimum acceptable
5. Rehiring a former employee
humanqualities necessary to perfrom a job
6. College recruiting
properly”
7. Internships

Job Specification Covers:

CREATIVE RECRUITMENT METHODS – signing
● Educational and Professional bonus – a lump sum of money that an employer
qualifications provides to entice an applicant to join or sign on
● Skills with the company.
● Practical experience

Week 3
Selection
What is Selection?
The screening or selection is a systematic
series of activities that is done to assess the
qualification and competencies of applicants so
that the employer can determine whether or not
the applicants can be hired for the vacancy.
Theoretical Bases
Reliability and validity are important in
screening of candidates – this is because the
different methods of screening or selection need to
be both reliable and valid so that hiring of
managers or HR interviewers are able to make a
good assessment of each candidate’s qualification
and fitness to fill the vacancy.
For purposes of applicant screening,
validity specifically refers to the extent to which
the screening method gives useful information
about how well an employee will actually perform
on the job. Validity is the most important factor in
considering whether or not to use an assessment
method, because an assessment that does not
accurately identify who will perform effectively on
the job has no value to the organization.
Selection / Screening Methods
a) Paper Screening
The first encounter that the
recruiters have with the applicants is usually
thorough their written application letters,
application forms, or resumes. These documents
can be submitted as a “hard copy” given personally
by the candidate, sent via mail or courier,
submitted through an electronic (or soft) copy, or
posted in a company website.
To make the work of the
recruitment specialist easier, some organizations
require applicants to fill out a standard company
prepared and company-issued application form.
29
This is advantageous because all applicants are
required to provide the same biographical data (or
biodata) deemed important by the company. The
“biodata” usually consists of demographic data,
educational background, previous job information,
examination results (i.e. bar, board, or civil service
exam), information on candidate’s social activities,
interests and preferences, job expectations, and
career goals. The structure form or biodata makes
screening more efficient since it makes the
comparison and selection decision be based on the
same type and amount of information from all of
the candidates. It is like comparing apples to
apples.
(b) Testing
Psychological or psychometric tests are
instruments that consists of a set of carefully
developed items, questions, or tasks that measure
specific behaviors, abilities or aspects of
personality.
There are multitude of tests that are
available for purposes of pre-employment; these
can be categorized under the following general
types of tests:
1. COGNITIVE ABILITY TESTS
Cognitive ability tests is called “IQ” tests. It
measure a variety of mental abilities such as
numerical ability, reading comprehension, logical
reasoning, general intelligence, learning ability,
verbal ability, etc. Normally made up of multiple
choice items ; paper and pencil or computer
generated; have specified time limits; measured in
terms of the total number of items that are
answered correctly.
2 kinds of cognitive ability tests:
(a) Test of achievement – focus on what an
applicant already knows or has learned in the past
(b) Test of aptitude – focus on what an individual is
capable of achieving in the future.
2. JOB KNOWLEDGE TESTS

There are jobs that require candidates to
possess knowledge about a particular field or
disciple because they are critical for the person to
be able to successfully and effectively perform the
job. There are tests that measure the level of
technical knowledge that the applicants possess in
a given field or discipline (i.e., accounting,
psychology, engineering, chemistry) these are
called the job knowledge tests.
3. PERSONALITY TESTS
Personality tests are those which measure
traits and examine aspects of a candidate’s
character or psychological make up which are
relevant to effective job performance. It measures
the aspects such as the person’s interests,
motivations, attitudes, perceptions regarding
certain situations and ways of interacting with
people.
It can be done through paper and pencil or
electronic format, multiple choice, true or false , or
Likert scale. No right or wrong answer. All that is
needed is that the test taker will answer all
questions honestly and as candidly as possible.
4. INTEGRITY TESTS
Polygraph or lie detector tests that use
machines to detect whether a person is being
truthful during an interview through direct
measurements of changes in physical state or
characteristics of a person. But this tests have long
been abandoned already.
Paper and pencil tests have been developed
to measure a candidate’s attitudes and experiences
related to personal integrity such as an individual’s
tendency to be honest, trustworthy, dependable,
reliable, and an exemplar of “pro-social behavior”.
It include questions about an individual’s
attitudes toward “theft and other deviant or illegal
acts, and questions about an individual’s prior
involvement in such behavior”. Propensity to
30
commit workplace theft and/or other
counterproductive acts.
5. SITUATIONAL JUDGMENT ANALYSIS
Situational judgment tests are those that
assess how candidates handle specific situations
encountered in the workplace. These tests often
measure judgment required for solving problems in
work related situations. Challenging but
hypothetical situations at work and ask the
candidates to choose what course of action they
would take to resolve the situation. Normally
written form or with the aid of computer.
6. WORK SAMPLE TESTS
Work sample test is a way of testing
candidates’ ability by giving them a sample of
typical work that is done by the position /job they
are applying for and then evaluating their
performance on the sample task. The tasks selected
for the tests must be those that are as similar as
possible with the functions that employees are
required to perform on the job.
7. PHYSICAL FITNESS AND ABILITY TESTS
Some job require candidates who are
physically fit and are able to take on physically
demanding tasks (such as lifting weights, being
exposed to extreme temperatures, prolonged
standing, prolonged visual attention, etc, ) These
are the tests which used the candidate’s physical
capacity (strength, endurance, tolerance, ) to
perform the tasks that incumbents in the position
will perform..
(c) INTERVIEW
An interview is primarily a question and
answer type conversation between a candidate and
one or more interviewers. During an interview, the
interviewer asks job related questions that the
candidate must answer.
There are different types of interviews
depending on the questions that are asked:

a) Behavioral Interview – questions that
ask the candidates to provide information on
actual past behaviors and actual past experiences
that are relevant to the job. Using this type of
questions will reveal the specific behavior needed
upon the job applicant for effective performance on
the job and then find out from the interview who
among the candidates demonstrate or have shown
those behaviors in the past.
b) Situational Interview - similar to the
situational judgment test, situational interview ask
the applicant to talk about how they would deal
with a particular hypothetical issue or situation in
the future. It involves problem-solving and
handling difficult situations that are typical in the
workplace.
c) Stress Interview – applicants are placed
in a stressful situation to see how they react under
pressure.. The “stress” or “pressure” during the
interview comes in the form of repeated difficult or
inappropriate questions, or when different
interviewers ask questions simultaneously or ask
long and varied questions one after another. The
interview sometimes is treated rudely before,
during and after or put in an intimidating or
unpleasant situation.
d) Structured Interview – one where
candidates are asked a fixed set of questions that
consists of the same number, sequence, and tyoe of
questions. The responses of the candidates are
recorded and assessed responses through a
standard, pre-determined and behaviourally
anchored rating system or evaluation form that
specifies clear standards for acceptable answers.
PRE-EMPLOYMENT BACKGROUND CHECKS – a
crucial step in the selection of candidates is
conducting a pre-employment check, which in some
countries is known as “vetting” or locally known as
“background checking”. One main component of
the background check is to process and verify all
character reference and information provided by
the candidate.
31
-verifying biographical and educational
information and past work experiences supplied by
the candidate are true and accurate. Contacting the
previous employers, reviewing authenticity of
documents submitted (i.e., TOR/diplomas).
CRIMINAL RECORDS CHECKS – clearance from the
NBI, police clearance, certificate of good moral
standing
MAKING THE HIRING DECISION
The screening process concludes with the
final decision to hire a candidate or group of
candidates. A good hiring decision is made through
an objective, systematic, thorough, and timely
review or analysis of factual information gathered
about the prospective candidate/s.
At the end of the screening process, the HR
practitioner and other decision makers must
meaningfully consolidate all the information about
the candidate/s and arrive at a sound and informed
decision about who to hire and to whom to make a
job offer.
METRICS IN RECRUITMENT AND SELECTION
Careful consideration has to be made in
choosing the recruitment and selection methods to
use, otherwise precious man-hours, effort and
company resources may be wasted on a yield of
applicants that is neither qualified nor sufficient in
number. HR Metrics relevant to talent acquisition
include cost-per-hire, time-to-hire, and applicant-
to-successful hire ratio.
(a) COST-PER-HIRE (CPH)- aims to measure all
the costs of all recruitment and selection related
activities needed to fill a vacant position in the
organization . CPH is a ration of the total amount
spent to the total number of hires in a specified
time period; it is considered a measure of cost
efficiency.

It is computed by the sum of all expenses
used for talent acquisition and dividing this sum by
the number of successfully hired candidates.
External costs (outside spending) –
job ad printing and placement costs, hunting fee,
rental for company booth space, payment for
testing services, purchase of test materials, fees of
external assessors
Internal costs (inside spending) – of the organization and the employees.
recruitment activities (salary of recruitment and
selection staff during the recruitment and selection
period, internal costs of the use of company
facilities, etc
(b) TIME-TO-HIRE METRIC- is the cumulative
amount of time needed to fill the open position in
the organization, is another measure of the
efficiency of the talent acquisition efforts.
Timeliness is key in filling a vacancy. A position
that is left vacant for a long period can lead to
serious disruptions in the work and operations of a
unit/organization.
Factors to be considered: complexitiy of the
recruitment and selection methods used,
availability or scarcity of candidates, number of
steps in the selection process, ability of the
organization to effectively conduct the recruitment,
selection and hiring processes.
(c) APPLICANT YIELD OR RATIO OF APPLICANT
HIRED TO EMPLOYEE
The ratio measures the proportion of
candidates hired and applications received and
processed. The ratio of 1 hire:50 candidates
indicates that out of 50 applicants for a vacancy,
one candidate is hired.
Week 4
Employee Training
WHAT IS TRAINING?
Training is a planned effort of a company to
contribute to learning or relearning new skills,
attitudes and competencies specifically needed to
32
achieve business objectives. Training efforts need to
aligned with the organizational strategies. When
designing training programs, the training designers
take into consideration the organizational
objectives which are defined by the management.
TRAINING PROCESS starts with analysing and
identifying operational and strategic training needs
EVALUATION OF THE TRAINING EFFORTS –
determine whether the training programs have
realized their objectives and have created expected
employee competencies needed to achieve
organizational objectives.
TRAINING FRAMEWORK
The TRAINING FRAMEWORK illustrates that
when a new employee enters the company, he / she
brings with him/her certain skills, competencies,
and values from former work environment or from
what was learned in school or at home.
To align these skills, competencies and
values to set the expectations in terms of behavior
and performance in the company, the employee
goes through an onboarding process in which
activities are prepared to orient and to allow the
new employee to blend to the new environment.
The socialization process allows the employee to
understand the culture and values of the company.
The formal training process goes hand in
hand with the acculturated and trained employees
on the specific skills and competencies needed to
succeed in his/her new job.
As the new employee completes the
process, the training efforts are evaluated based on
efficiency, skills and behavior learned by the
employee and the impact of the process has on the
company objectives.
BENEFITS OF TRAINING
1. Training helps employees develop specific
skills – it pertain to the use of new technology or

new strategy that a company is adopting
knowledge and/or use of new products.
2. Training assists employees to develop skills
to work efficiently in a team – training results in
increased awareness and understanding of each
other’s roles, the company’s culture and the el
xpectation from all members of the organization.
3. Training supports the company strategies in
delivering business results – training must be
built upon the knowledge that it is part of a long
term organizational learning process. It should
determine what can be done before, during and
after the training that can lead to the increased
level of trainee competencies and the organization
as a whole.
PROBLEMS ASSOCIATED WITH TRAINING
1. Training requires resources – one of the
potential problems is the cost of process, i.e.,
financial support to fund trainers, formal learning
in college/university, seminar or training
conference
2. Training program can be time-consuming to
implement – adequate time is needed to cover all
the training materials, and there is not always
enough time for deepening the training.
3. Impact of training is difficult to link to the
attainment of objectives. The process of training
is complex and it takes a good trainer to ensure
quality of training. Linking the impact of training
to the overall business objectives can be difficult as
it takes time to assess organizational impact of
training and study the different processes of the
company to determine which, including training,
impact on the business goals.
ORIENTATION AND ONBOARDING ACTIVITIES
1. ORIENTATION – the purpose of orientation is :
(a) to reduce employee anxiety or failure or fear on
the job. Effective orientation equips the new person
33
with information, clarifies expectations and reduces
anxiety; (b) it lowers employee turn over rate. If
employees perceive they are ineffective, unwanted
or unneeded, they may react to these feeling by
quitting. Orientation is by making the new person
feel welcome and at home and part of the team; (c)
it saves time. Improperly oriented employees still
get the job done, and to do so they need help. The
most likely people to provide this help are co
workers and supervisors who will have to spend
time orienting new employees; (d) it develops
realistic expectations. New employees must learn
realistically what the organization expects of them,
and their own expectations of the job must neither
be too low nor too high
2. ON BOARDING PROCESS
3 STEPS:
a. Pre-orientation- establishing job fit. The job
specification usually indicates the competencies,
skills s well as the job and company expectations
from an employee. RJP or realistic job preview a
process of determining a match between
expectations and qualifications of an applicant
with that of the company such that both parties
achieve the objectives set.
b. Employee orientation - as a job offer is
accepted, the new employee goes through the
orientation process or onboarding process. It
introduces the employee to the organization.
Orientation of the policies, company handbook,
benefits, tour of the facilities and introduction to
key offices where the employee is assigned,
discussion of job expectations, practices expected
from all employees, processes and procedures that
need to be observed. It is a proactive approach in
ensuring that the first few days of the new
employee is spent on productive activities and that
the employee starts with the “right” practices
C. Post-orientation – this happens once the basics
of the orientation have been completed. Immersion
into the company consists of socialization and
acculturation activities in which the employee is
formally and slowly introduced into the different

teams. Some companies assign a mentor or a
“buddy” to act as the guide should a new employee
need to clarify company values, practices or work
processes.
THE TRAINING PROCESS
a. Training needs analysis– Needs
assessment is a process used to determine whether
the training is necessary or the solution to closing
the performance gap in the organization. This
involves the analysis of the needs of the following
domains:
Organizational analysis – it involves examining
the company’s mission, long and short term
business objectives and determining the
appropriate training programs to achieve these
goals.
Task analysis – it involves a detailed duty of the
jobs in the organization to identify the skills and
behaviors needed to do these jobs. Analysing the
job description and other company information
about the job.
The person analysis – a process to identify who
needs training and the employees’ readiness level.
This step involves (1) determining whether
performance deficiencies result from a lack of
knowledge, skill, or ability (a training issue) or
from a motivational or work design problem; (2)
identifying who needs training; and, (3)
determining employees’ readiness for training.
b. Training objectives and design- allows the
execution of the training design that has been
planned for. Specify the following:
Program objectives – enumerate the overall scope
of the training activity such as skills and behaviors
that will be learned and the expected learning
outcomes at the end of the training programs.
Program content – lists the topics that will be
covered during the training course. This clarifies the
skills gap and closing these gaps as well as the
34
alignment of the training to the attainment of
organizational goals.
c. Development of the training program done
through the following training methodologies:
Instructor-led or guided-training
Lecture refers to the traditional method of learning
in a classroom format. Lecture allows the trainees
to be exposed to the knowledge of an expert
lecturer not available in published materials.
Lectures are conducted with use of technology.
Web conferencing, webinar, workshops, interactive
conferences, use of internet technology and
gadgets that allow trainers and trainees to
interact.
Outdoor training is an approach often used for
training activities conducted outside company
primarily for team building and leadership training.
Teambuilding games or activities where task is
about to accomplished or solving problems with
use of equipment or props.
Training simulations refer to imitating real life
work competencies through the use of technology.
It provides the employees with real life experiences
in an exciting way for an enduring learning to take
place.
Duration of the training- to determine if enough
time is given for skills training, delivery and
assessment. Whether the training can be done
during working hours or off site
On the job training an approach that is conducted
while the employee is actually working. Skills can
be gained while trainees are carrying out their jobs.
Coaching is a close working relationship between
an experienced employee and the trainee to help
the latter learn the skills and processes by
providing instructions or demonstration or both;
Mentoring assigns each trainee to an experience
staff who acts as a guide and helper and usually
offers more personal support; Job rotation allows a

trainee to be given several jobs in succession and to
gain experience of a wide range of activities.
Off the job training refers to training method in
which employees are taken from their place of
work to be trained. Attending external training,
enrolling in distance learning or online courses, and
taking up a sponsored course in college or graduate
school.
Technology based training (TBT) is a computer
based training methodology that uses web based,
intranet-based, DVD or CD based training on any
topic.
● Delivery of the training
● The trainer
● Skills to be assessed after training
● Assessment tools that will be used
d. Methodology and validation of training
validation by piloting the program uses interviews,
surveys, or focused group discussions.
e. Evaluation of the programs’ effectiveness
ensures the preparation of the appropriate training
assessment tools that will be used after training
has taken place. It takes the following levels:
Reaction – how did the participants feel about the
training program? This measures the participant’s
reaction to the program and how the participants
felt about the training or learning experience.
Happy sheets; verbal reaction; post training
surveys; feedback forms which covers: speaker,
venue, content and materials.
Learning – is there an increase in knowledge –
before versus after training? Measures the skills,
knowledge and/or attitude that the participants
are expected to have learned.
Behavior- did the participants change their
behavior and apply learning back on the job? It
measures how much transfer of knowledge, skills,
and attitude has occurred once participants return
to their jobs.
35
Results – to what extent did the change in
behavior affect the organization? Evaluation of
results measures the impact of the training
program by the trainee//s on the business such as
on output, quality, cost, time ad customer
satisfaction.
Return on investment (ROI) It involves making
estimates or obtaining measurements of the
expenses and benefits connected with a training
program this calculating ROI. ROI is a measure of
the economic payback obtained by an organization
over a particular time period in exchange for a
given investment in a training program.
Physical Education
Aerobic Gymnastics
AEROBIC GYMNASTICS BACKGROUND
Aerobic exercise programs have been available for
many years, bringing health benefits to millions of
people. They are offered at a low cost, need little or
no equipment and are practiced in schools,
community centres and fitness clubs worldwide.
Aerobics dates back to 1968 and has since expanded
worldwide. Aerobic Gymnastics, born in the United
States in 1988 and Japan in the same year, is a
unique combination of aerobic dance choreography
and gymnastics elements. It creates an opportunity
for children, adolescents and adults to participate
and/or compete in a low risk sport while keeping
the artistic quality and fun of aerobics. Still in its
maturing phase Aerobic Gymnastics has been
practiced within the Federation of International
Gymnasts (FIG) for demonstration purposes for
many years. In 1994 at the Geneva Congress, seeing
the potential of this growing sport, the General
Assembly of FIG decided to adopt it as yet another
discipline, to have complete recognition by the
world’s top sporting bodies, including the General
Association of International Sports Federations and

the International Olympic Committee. In
conjunction with FIG the sport continues to grow
and develop. The Aerobic Gymnastics World
Championships have been held annually since 1995.
The Gymnastics Ontario Aerobic Gymnastics
Committee wishes to promote Aerobic Gymnastics
in Ontario and to play a leadership role in the
progression of this popular sport. We invite you to
embark on this new and expanding discipline of
gymnastics and fitness and be part of this
important phase in the history of Aerobic
Gymnastics.
AEROBIC GYMNASTIC - WHAT IS IT?
Aerobic Gymnastics is a recreational and
competitive activity that utilizes a unique
combination of aerobic dance choreography and
gymnastic elements. According to the definition in
the FIG Code of Points, Aerobic Gymnastics is the
ability to perform continuously with high intensity
movement patterns to music which originates from
traditional aerobics. The routine must demonstrate
creativity with the perfect integration of all
movements, music and expression.
The routine must use the seven basic steps of
aerobics, variations of dance moves and at least
four difficulty elements to a maximum of 10
elements for a competitive routine. The routines
can be very simple or complex depending on the
level of the participants. There are 6 different event
categories in Aerobic Gymnastics that if a
participant wants to compete can select a category
that suits them. The categories are as follows:
1. Individual Women, Individual Men
2. Mixed Pairs
3. Trio (any combination of males/females)
4. Groups of 5 (any combination of males/females)
5. Aerobic Dance (8 – any combination)
6. Aerobic Step (8 – any combination)
Aerobic Gymnastics is another exciting and
dynamic discipline of the sport of gymnastics. Its
36
popularity is world-wide with programs operating
from recreational, school-based programs to
Provincial, National, and International competitive
programs. With today’s focus on fitness and the
growing need for people of all ages to be physically
active, Aerobic Gymnastics offers a unique
opportunity to satisfy both.
Aerobic Gymnastics is a creative combination of
aerobic and dance choreography with fitness and
gymnastic elements. It involves high-energy/cardio
routines that maximize development of core
strength, flexibility and power.
Aerobic Gymnastics appeals to a wide range of
participants from young children, teenagers,
adults, to dancers, ex-gymnasts/athletes and
fitness buffs. It is an excellent activity of fun and
fitness for gymnastics clubs seeking to provide
new, innovative programming or to enhance
existing programs.
Aerobic Dance is the newest competitive event
category of FIG Aerobic Gymnastics that was
introduced in 2011. Aerobic Dance is designed for a
group of 8 (any combination of males/females)
that incorporates greater segments of dance
choreography with aerobic content. Many clubs or
school programs refer to this recreational modified
version as Gym Dance (small or large groups of 4
or more) in order to distinguish it from the
competitive version.
The Aero-Gym Fitness Manual is an excellent
resource that provides a variety of activities that
introduce the basic components of Aerobic
Gymnastics to teachers/coaches, clubs and schools
seeking to provide new, innovative programming
or to incorporate and enhance existing
recreational/curriculum programs.
WALK, JOG, SKIP, KNEE LIFT, KICK, JUMPING
JACK, OR LUNGE

- your way into the Aerobic Gymnastics
Program.
Aerobic Gymnastics
An Aerobic Gymnastics routine is a creative
combination of “Basic Steps” and “Elements”. It
interprets a piece of fast paced, upbeat music
through movement.
The 7 Basic Steps An Aerobic Gymnastics
routine must include all of the 7 Basic Steps listed
below:
● March toe-ball-heel locomotion (e.g., v-
step, grapevine, step touch, heel dig)
● Jog knee flexion (e.g., circular, backward)
● Skip knee flexion to extension (e.g., front,
side, traveling)
● Lunge extension of one hip, flexion of the
other with a knee flexion (e.g., front, side,
traveling)
● Jack abduction of the hips (e.g., cross jack,
sideways moving)
● Knee Lift flexion of the hip to at least 90
degrees with knee flexion (e.g., cross, front,
side)
● Kick flexion or abduction of the hip to at
least 90 degrees (e.g., side, front, moving
backwards)
All steps can be done as high or low impact,
(bounce or no-bounce) with infinite options for arm
movements. The movements should be on-beat and
interpret the music. It is easiest to group basic step
combinations into 8 count sequences.
A routine may also include optional dance steps
like:
● Chasse
● Charleston
● Mambo
● Pendulum
● Pony etc.
Difficulty Elements
37
A proper Aerobic routine must also include
“Difficulty Elements” which are the gymnastics-
based skills. Please note that Aerobic Gymnastics
also allows tumbling or acrobatic elements;
however, it prohibits held inversions or any hyper-
extension of the back (ie. bridges, ring leaps/jump).
For safety and to maintain the Aerobic style, the
back should be in a “neutral spine” position at all
times during the Elements and dance of the routine.
There are four Aerobic Difficulty Element
Groups and a routine must include at least one
Element from each group. The Element Groups are:
● GROUP A (Dynamic Strength): pushup,
straddle pushups, triceps pushups, hinge
pushups, explosive pushups, free fall, leg
circles
● GROUP B (Static Strength): supports held
for 2 seconds (V support, straddle support,
L support, Lever, Planche )
● GROUP C (Jumps and Leaps): Split Leap,
tuck, straddle, pike, jump full turn
● GROUP D (Flexibility and Balance/Turns):
vertical splits, frontal splits, pancake, full
pirouette, illusions
Aerobic Gymnastics – Routine Composition
Aside from Elements linked with combinations of
the 7 Basic Steps and dance, there are other
composition requirements unique to Aerobic
Gymnastics. Combined, they create the “Aerobic
Gymnastics Style” of movement.
● Athletes are judged on presentation. They
must smile naturally, make eye contact
with the judges or audience, and look
confident.
● Transitions should be smooth at all times-
going from the floor to surface, from an
Element to a basic step, etc. There should be
no obvious pauses in the routine. Each beat
of music should be accounted for.
● Athletes should make full use of the floor
space – all corners and centre.

● Athletes should travel in all directions –
forward, backward, sideways, diagonally
and in a circle.
● A routine should have a balance of floor,
surface and airborne content.
● As a group, athletes should make a variety
of formations. For example, the whole
group is arranged in a line, v-shape, circle
or square.
● Arm and leg movements are strong and
with a definite shape. (sharp and crisp, not
graceful). Hand positions include fist, open
fan, or closed razor.
● Correct posture – neutral alignment without
hyperextension of joints. Alignment of leg
(knee over top of foot) with aerobic steps.
● Routines should include interactions
(touching and occasional eye contact)
between group members and project a
“team effort”. Routines with 2 or more
athletes must also include lifts. Lifts that
propel are prohibited.
● Athletes performing in a group should
synchronize their movements and timing.
● No prohibited moves – propelled Lifts,
bridges, ring leap/jump, twists
SPORTSMETRICS JUMP TRAINING
Dr. Walter R. Lowe
JUMP DESCRIPTIONS
18O JUMPS - Two-footed jump, rotating 180° in
mid-air. Keep arms At the side in a 90° angle. Hold
each landing for 2 sec.Repeat in reverse direction
SCISSORS CISSORS JUMP - Hold each landing for
2 sec. Start in stride position with one foot well in
front of the other. Jump up, alternating FOOT
positions in mid-air
BOUNDING FOR DISTANCE - Start bounding in
place and slowly increase distance with each step,
keeping knees high.
BOUNDING IN PLACE - While leaning forward
over the toes, jump from one leg to another
38
straight up and down progresseively increasing
rhythmn and knee high.
BROAD JUMP-STICK LANDING - Two-footed jump
as far as possible. Hold landing (knee bent) for 5
seconds.
CONE JUMPS - With feet together, jump side-to-
side over cones quickly. Then performs jumps
forward and backward.
HOP, HOP, STICK - Perform 3 single leg hops,
holding the third landingfor 5 seconds with knees
slightly bent. Increase distance of hops as
techniques improve. Alternate legs.
JUMP INTO BOUNDING - Two-footed broad jumps.
Land on single leg, then progress into bounding for
distance
SINGLE LEG JUMPS FOR DISTANCE - One-legged
hop for distance. Hold landing for 2 seconds with
knee slightly bent.
SQUAT JUMPS (FROG JUMPS) - Standing jumps
raising both arms overhead, land in squatting
position touching both hands on the floor.
STEP, JUMP ,UP,DOWN, VERTICAL - Two-footed
jump into 6-8 inch box or stack gym mats. Reverse
and jump forward off box with two feet. After
landing, quickly jump straight up with armsraised
overehead.
TUCK JUMPS - From standing position, and bring
both knees up to the chest as high as possible.
Repeat quickly.
WALL JUMPS(ANKLE BOUNCES) - with knees
slightly bent and arms raised overhead, bounce up
and down off toes.
JUMP, JUMP, JUMP, VERTICAL - 3 broad jumps
with vertical jump immediately after landing the
third broad jump. Raise arm straight up after
landing vertical jump.
IMPORTANT INFORMATION:
⇒ These jumps performed on a surface such as
a track or gym mats.
⇒ Proper form is a must!
 39

⇒ Stop when the athlete loses proper form or STRATEGY - A Plan of action or policy design to
fatigue has set in. achieve a major or overall aim.
⇒ Rest time is double the jump time. 30 sec A SIMPLE MARKETING SYSTEM
rest for rep jumps.

STMM

What is Marketing?
Marketing is an organizational function and a set
of processes for creating, communicating, and
delivering value to customers and for managing
customer relationships in ways that benefit the 3 PHASES OF STRATEGIC MARKETING
organization and its stakeholders.

MARKETING MANAGEMENT - is the art and science

of choosing target markets and getting, keeping,
and growing customers through creating,
delivering, and communicating superior customer
value.

WHAT IS MARKETED?

● Goods

● Services ● STRATEGIC FORMULATION -

● Events ○ This requires a deep dive into not
only your business but your
● Experiences customers and competitors.
● Persons ○ The first step is a SWOT analysis.
Analyze your business's strengths
● Places and weaknesses before looking at
● Properties the opportunities and threats
coming from elsewhere.
● Organizations ○ A competitive analysis, analyzing
● Information their strategies and markets.
○ PESTEL analysis
● Ideas ○ to look at your marketing mix.
STRATEGIC MARKETING MANAGEMENT - Is the ○ Make SMART GOALS.
process of implementing your business’ mission ● STRATEGY IMPLEMENTATION
through specific and strategic processes in order to ○ This is the action to all of that
maximize your current marketing plan planning and analysis.
○ Strategic marketing plans are
designed to be adaptable
 40

○ It’s about making actionable steps

towards achieving your commercial
goals.
○ Budgeting for stock and resources,
setting up distribution models and
marketing channels, developing
content plans and cash flow
accounting

● STRATEGIC EVALUATION
○ Evaluation is an important part of
marketing: it helps your company
eliminate ineffective strategies and
develop an overall plan that helps
build your business.
○ By scheduling regular evaluations
of your marketing plan, it can save
wasted money by modifying or
eliminating campaigns that are not
reaching your target market or
garnering the response you need.
○ As you plan, build in mechanisms to
monitor the success of each
marketing effort to make
evaluation cheaper and easier.
HOLISTIC MARKETING

MARKETING MANAGEMENT TASK

● Develop market strategies and plans
● Capture marketing insights
● Connect with customers

● Build strong brands
● Shape market offerings
● Deliver value
● Communicate value
● Create long-term growth
Imperative Market - Driven Strategy
CHARACTERISTICS OF A MARKET - DRIVEN
STRATEGY
● Becoming market-oriented
○ Customer focus
○ Competitor intelligence
○ Cross-functional coordination
○ Performance implications
○ Customer is the focal point of the
organization
○ Commitment to continuous creation
of superior customer value
○ Superior skills in understanding and
satisfying customers
○ Requires involvement and support
of the entire workforce
○ Monitor rapidly changing customer
needs and wants
○ Determine the impact of changes on
customer satisfaction
○ Increase the rate of product
innovation
○ Pursue strategies to create
competitive advantage
CHARACTERISTIC OR MARKET ORIENTATION
● Customer Focus
○ What are the customer’s value
requirements?
● Competitive Intelligence
○ Importance of understanding the
○ competition as well as the customer
● Cross-Functional Coordination
○ Remove the walls between business
functions
● Performance Consequences
○ Market orientation leads to
41
○ superior organizational
performances
Becoming market-oriented organization
● Information Acquisition
● Cross-Functional Analysis of Information
● Shared Diagnosis and Coordinated Action
● Delivery of Superior Customer Value
Market Orientation
● Information Acquisition
○ Gather relevant information on
customers, competition, and
markets
○ Involve all business function
● Inter-functional Assessment
○ Share information and develop
innovative products with people
from different function
● Shared diagnosis and action
● Deliver superior customer value
DETERMINING DISTINCTIVE CAPABILITIES
“Capabilities are complex bundles of skills and
accumulated knowledge, exercised through
organizational processes, that enable firms to
coordinate activities and make use of their assets.”
- George S. Day, Journal of Marketing, October
1994, p.38.
● Desirable capabilities
○ Applicable to multiple competition
situation
○ Superior to competition
○ Difficult to duplicate
TYPES OF CAPABILITIES
● Outside in processes
● Spanning processes
● Inside-out processes
ORGANIZATION’S PROCESS
External emphasis
● Outside-in process
○ Market sensing
○ Customer linking
○ Channel bonding
○ Technology monitoring
● Inside-out processes
○ Financial management
○ Cost control

○ Technology development
○ Integrated logistics
○ Manufacturing/transformation
processes
○ Human resources management
○ Environment health and safety
● Spanning processes
○ Customer order fulfillment
○ Pricing
○ Purchasing
○ Customer service delivery
○ New product/service development
○ Strategy development
CREATING VALUE FOR CUSTOMERS
● Customer Value:
○ Value for buyers consists of the
benefits less the costs resulting from
the purchase of products.
■ Superior value: positive net
benefits
● Creating Value:
○ “Customer value is the outcome of a
process that begins with a business
strategy anchored in a deep
understanding of customer needs.”
VALUE COMPOSITION
● Benefits
○ Product
○ Services
○ Employees
○ Image
● Cost (saccrifices)
○ Monetary cost
○ Time
○ Psychic and physic costs
● Value (gain/loss)
MARKET DRIVEN INITIATIVES
● Market Sensing Capabilities
○ Effective processes for learning
about markets
○ Sensing:
■ Collected information needs
to be shared across
functions and interpreted to
determine proper actions.
● Customer Linking Capabilities
42
○ Create and maintain close customer
relationships
● Aligning Structure and Processes
○ Potential change of organizational
design
■ Improve existing processes
■ Process redesign
○ Cross-functional coordination and
involvement
○ Primary targets for reengineering:
● Sales and marketing,
customer relations,
order fulfillment,
and distribution
CORPORATE BUSINESS AND MARKETING STRATEGY
Corporate strategy
● Deciding the Scope and Purpose of the
Business
● Business Objectives
● Actions and Resources for Achieving
Objectives
CHARACTERISTIC OF A SUCCESSFUL STRATEGY
● Unique competitive position for the
company.
● Activities tailored to strategy.
● Clear trade-offs and choices vis-à-vis
competitors.
● Competitive advantage arises from fit
across activities.
● Sustainability comes from the activity
system not the parts.
● Operational effectiveness a given.
CORPORATESTRATEGY COMPONENTS
● Management’s long-term vision for the
corporation
● Objectives
● Assets, skills, and capabilities
● Businesses in which the corporation
competes
● Structure, systems, and processes
● Creation of value
➔ The marketing strategy process
◆ Markets, segments and customer
value
 43

●Markets and competitive ● Developing the strategic plan for each

space business
● Strategic market ○ Preparing the marketing plan
segmentation ■ Planning relationships and
● Strategic customer frequency
relationship management ■ Planning considerations
● Capabilities for continuous ● Responsibility for
learning about markets preparing plans
➔ Designing market-driven strategies ● Planning unit
● Market targeting ■ Preparing the marketing
and strategic plan
positioning
● Strategic Markets and Competitive Space
relationships
Strategic Plans Lose Favor
● Innovation and new
Slump Showed Bosses Value of Flexibility, Quick
product strategy
Decisions
◆ Market-driven program
development
● Strategic brand MARKETS AND STRATEGIES
management ● The Challenges ―
● Value chain strategy ○ Markets are increasingly complex,
● Pricing strategy turbulent, and interrelated.
● Promotion strategy ○ Importance of a broad view of the
➔ Implementing and managing market.
market-driven strategy ○ Essential to develop a vision about
◆ Designing market-driven how the market is likely to change
organizations in the future.
◆ Marketing strategy ● Continuous Monitoring is Necessary to:
implementation and control ○ Find promising opportunities
MARKETING STRATEGY PROCESS ○ Identify shifts in value requirements
● Market segments and value ○ Understand competitors’ positioning
● Designing market-driven strategies ○ Guide targeting and positioning
● Market-drive progam decisions
● Implementing and managing market-driven OPPORTUNITIES OUTSIDE THE COMPETITIVE
strategy BOX
The competitive box
CHALLENGES IN THE MODERN ENVIRONMENT
● Escalating globalization TRADITIONAL COMPETITOR
● Technology diversity and uncertainty Coventional value preposition
● The Web 2.0 Existing Customer Base
● Ethical behavior and corporate social New customer base(s)
responsiveness
STRATEGIC MARKETING PLANNING MARKET IMPACT STRATEGIES
 44

● Market changes often require altering has won much automobile insurance
strategies business for Progressive.
● Forces of change create both market ● These initiatives also enable Progressive to
opportunities and threats reduce its own costs – the cost of storing a
● Inherent danger in faulty market sensing damaged automobile for a day is $28,
DEFINING AND ANALYZING PRODUCT - MARKET about the same as the profit from a six-
● Determine the Boundaries and Structure of month policy.
the Product-Market PRODUCT-MARKET BOUNDARIES AND STRUCTURE
● Form the Product-Market ● Determining Product-Market Structure
● Describe and Analyze End-Users ○ Start with the generic need satisfied
● Analyze Competition by the product category of interest
● Forecast Market Size and Rate of Change to management
MATCHING NEED WITH PRODUCT BENEFITS ○ Identify the product categories
● A product – market matches people with (types) that can satisfy the generic
needs to the product benefits that satisfy need
those needs ○ Form the specific product – markets
● “A product – market is the set of products within the generic product – market
judged to be substitutes within those usage EXTENT OF MARKET COMPLEXITY
situations in which similar patterns of Three characteristics of markets:
benefits are sought by groups of ● Functions or uses of the product
○ Flour
customers.”*
○ Textile
INNOVATION FEATURE
○ Rice Grain
Progressive Insurance:
○ Paint
Customer Needs at the Center of Strategy
○ Gravel and Sand
○ Essential Oils
● In the period 1994 to 2004, Progressive
● The enabling technology of the product
Insurance increased sales from $1.3 billion
○ Aseptic Packaging
to $9.5 billion, and ranks high in the
○ Appable
Business Week Top 50 U.S. companies for
○ GPS
shareholder value creation.
○ Sustainable Power Source
● The company invents new ways of
○ Multi-functional
providing services to save customers time,
● Customer segments in the product-market
money and irritation, while often lowering ○ Men
costs at the same time. ○ Women
● Loss adjusters are sent to the road accidents ○ Boys
rather than working at head office, and ○ Girls
they have the power to write checks on the ○ LGTBQ
spot. ○ College Students
● Progressive reduced the time needed to see ○ Bakers
a damaged automobile from seven days to ○ Sari-sari store owners
nine hours. ○ Backpackers
● Policy holders’ cars are repaired quicker, ○ Staycationers
and the focus on this central customer need ○ Rock jobbers
 45

IDENTIFYING AND DESCRIBING END-USERS ● Key competitive advantages (e.g., access to

● Illustrative buyer characteristics in resources, patents)
consumer markets: DEVELOPING STRATEGIC VISION ABOUT THE
○ Family size, age, income, FUTURE
geographical location, sex, and ● Industry Boundaries Blurring and Evolving
occupation ● Competitive Structure and Players Changing
○ Illustrative factors in organizational ● Value Migration Paths
markets: ● Product Versus Business Design Competition
○ Type of industry ● Firms are Collaborating to Influence
○ Company size Industry Standards
○ Location Strategic Marketing Segmentation
○ Type of products
LEVELS AND TYES OF MARKET SEGMENTATION
HOW BUYERS MAKE CHOICES
● Strategic segmenation
● BUYING DECISION PROCESS:
○ Vision
○ Problem recognition
○ Information search ○ Strategic intent
○ Alternative evaluation ○ Product benefits
○ Purchase decision ● Managerial segmentation
○ Post-purchase behavior ○ Resource allocation
ENVIRONMENTAL INFLUENCES ○ Alignment
● External factors influencing buyers’ needs ○ Planning
and wants: ● Operational segmentation
○ Government, social change, ○ Marketing programs
economic shifts, technology etc. ○ Advertising
○ These factors are often non- ○ Sales
controllable but can have a major ○ Distribution
impact on purchasing decisions BEST BUY SEGMENTATION STRATEGY
BUILDING CUSTOMER PROFILE
● Jill’s - “soccer moms”
● Start with generic product – market
● Barry’s - wealthy professionals
● Move next to product- type and variant
● Buzz’s - “tech enthusiasts”
profiles >> increasingly more
● Ray’s - the family man
specific
● Mr Storefront - the small business customer
● Customer profiles guide decision making
● Carrie’s - young, single females
(e.g. targeting, positioning, market
● Helen and Charlie’s - older couples whose
segmentation etc.)
children have left home
KEY COMPETITOR ANALYSIS
FROM MASS MARKET TO MICRO MARKET
● Business scope and objectives
● Management experience, capabilities, and
weaknesses OLD NEW
● Market position and trends
● Market target(s) and customer base CONSUMER Passively Empowered
receive, media users,
● Marketing program positioning strategy
whateve tv Control and
● Financial, technical, and operating
shape content
capabilities
networks,
 46

Buyer’s need/preferences
thanks to
TiVo,ipad and REQUIREMENTS FOR SEGMENTATION
broadcast ● Identifiable segments
internet ● Actionable segments
● Favorable cost/benefit
ASPIRATION To keep up To standout
with the crowd with the crowd ● Stability over time
● Response differences
TV CHOICE Three Three APPROACHES TOSEGMENT IDNTIFICATION
networks plus networks plus
● Identifiers of customer groups
maybe a PBS video on
station demand ● Customer response profile
● Characteristics of people and organization
MAGAZINES Age of the big Age of special ● Use situation
glossies: Time, interest
STRATEGIC ANALYSIS OF MARKET SEGMENT
Life, magazine of
Newsweek every age and ● Customer analysis
affinity group ● Competitor analysis
● Positioning analysis
ADS Everyone Talking to a
● Financial and market attractivenes
hums the group of one,
Alka-Seltzer ads go ever Strategic Customer Relationship Management
jingle narrower
PIVOTAL ROLE OF CUSTOMER RELATIONSHIP
BRANDS Rise of the big Niche brands, MANAGEMENT
uniquitious product DEVELOPING A CRM STRATEGY
braands from extension and
● CRM Levels
Coca Cola to mass
Tide customization ● CRM Strategy Development
mean many ● CRM Implementation
product VALUE CREATION PROCESS
variations
● Customer Value
● Value Received by the Organization
SEGMENTATION AND MARKET-DRIVEN STRATEGY ● CRM and Value Chain Strategy
● Segmentation CRM STRATEGIC MANAGEMENT
● Value opportunities ● Implementation
● Capabilities/segment match ● Performance Metrics
● Targets ● Short-Term Versus Long-Term Value
● Positioning strategy ● Competitive Differentiation
MARKET SEGMENTATION ACTIVITIES AND DECISION CUSTOMER RELATIONSHIP MANAGEMENT
● Market to be segmented ● CRM is a cross-functional core business
● Decide how to segment process concerned with achieving improved
● Form segments shareholder value through the development
● Finer segmentation strategies of effective relationships with key
● Strategic analysisi segments customers and customer segments.
SEGMENTATION VARIABLES ○ CRM Recognizes That Customers:
Purchase behavior ■ Vary in their economic
Characteristics of people/organizations value to the company
Use situation

■ Differ in their expectations
toward the firm
CUSTOMER LIFETIME VALUE
● Customer lifetime value (CLV) calculates
past profit produced by the customer for
the firm – the sum of all the margins of all
the products purchased over time, less the
cost of reaching that customer
○ To this is added a forecast of
margins on future purchases (under
different assumptions for different
customers), discounted back to their
present value.
○ This process provides an estimate
of the profitability of a customer
during the time span of the
relationship.
○ The CLV calculation is a powerful
tool for focusing marketing and
promotional efforts where they will
be most productive.
PERSPECTIVE TOWRDS CRM
● STRATEGIC - THE ENTIRE COMPANY
● THE CUSTOMER
● REQUIRED MARKETING FUNCTIONS
THE STEPS IN DEVELOPING CRM
● Gain enterprise commitment
● Build a CRM project team
● Business needs analysis
● Define the CRM strategy
DEFINE CRM STRATEGY
● Value Proposition
● Business Case
● Customer Strategy
● Enterprise Transformation Plan
● Other Stakeholders
IMPLEMENTATION DANGER
● Implementing Without Developing a
Customer Strategy
● Failing to Initiate Necessary Organizational
Change
47
● Allowing Technology to Dominate the CRM
Process
● Focusing on the Wrong Customers
VALUE CREATION PROCESS
● THE VALUE EXCHANGE
○ Value Received by the Organization
○ Value Received by the Customer
○ Successful Value Exchange
CRM AND VALUE EXCHANGE STRATEGY
The Perfect Customer Experience
“The perfect customer experience, which must be
affordable for the company in the context of the
segments in which it operates and its competition,
is a relatively new concept. This concept is now
being embraced in industry by companies such as
TNT, Toyota’s Lexus, Oce, and Guinness Breweries,
but it has yet to receive much attention in the
academic literature. Therefore, multi-channel
integration is a critical process in CRM because it
represents the point of co-creation of customer
value. However, a company’s ability to execute
multi-channel integration successfully is heavily
dependent on the organization’s ability to gather
and deploy customer information, from all
channels and to integrate it with other relevant
information.”
CRM AND STRATEGIC MARKETING
From the perspective of strategic marketing, there
are several reasons why CRM is important and why
there should be extensive marketing involvement in
decisions about CRM. Importantly, an
organizational perspective is needed in guiding the
CRM strategy.
Capabilities for Learning about Customers
and Market
● Market-driven strategy, market sensing
and learning processes
● Marketing information and knowledge
resources
 48

● Marketing intelligence and knowledge ● Scanning processes

management ● Specific marketing research studies
● Ethical issues in collecting and using ● Internal and external marketing
information information resources
LEARNING CAPABILITIES AT P&G ○ Relationships with external
● Competitive strength from superior marketing research providers
customer knowledge BARRIERS TO MARKET LEARNING
● To deliver a customer experience, less ● Managers reject new insights/information
formal research, more one-to-one ● Rigid organizational structures and
communication inflexible information systems
○ Consumer Village ● Politics favour the status quo
○ Online virtual reality Cave ● Overwhelming pressure of existing business
○ Watch people clean baths operations
○ Understand what it is like to live on ● Tendency to “active inertia”
$50/month BEST BUY’S CUSTOMER KNOWLEDGE STRATEGY
○ Social networking sites ● Strategy treats customers as individual,
MARKET SENSING ANDLEARNING PROCESS develops solutions for needs and engages
● Market sensing processes employees to serve them
● Learning organization ● New ideas from listening more closely to
○ Learning and competitive customers and employees
advantage ● Knowledge shared with manufacturers and
○ Learning about markets product developers
○ Barriers to market learning ● Core innovation competency is gathering
processes and synthesizing customer intelligence
MARKET SENSING AT TESCO INTERNATIONAL CUSTOMER DESIGN AT XEROX
● Retailer entry to U.S. grocery market, not ● “Customer-led innovation” - “dreaming
with existing format with the customer”
● Discovering what U.S. consumers want: ● Not just building prototype and getting
○ Senior managers live with U.S. feedback
● Focus groups as first step in commercial
families
printer design
○ Probe lifestyles of families
● Changing designs in response to customer
○ Prototype store insights
● Developing a new retail format and ● Investment in understanding what
targeting the “grocery gap” customers think about the “bright ideas”
MARKET SENSING PROCESSES MARKETING RESEARCH PROJECT
● Open-minded inquiry processes ● Defining the problem
● Analyzing competitors’ actions ● Understanding the limitations of the
● Listening to front-line employees research
● Searching for latent customer needs ● Quality of the research
● Scanning the peripherary of the market ● Costs
● Encouraging experimentation ● Evaluating and selecting suppliers
MARKETING INFORMATION AND KNOWLEDGE ● Research methods
RESOURCES EXISTING MARKETING INFORMATION
 49

● In-company resources ● Magnetic resonance imaging (MRI)

● Open source resources ● Pictures response of brain to stimuli
● Research agency resources ● Probing consumer preferences is
CREATING NEW MARKETING INFORMATION controversial
● Observation and ethnographic studies ● Invasive
○ Marriott - rethink hotel experience ● Privacy issues
for “road warriors” ● Information sharing
○ GE - developing plastic fibers ○ Insurance companies
position ○ Employers
○ Intel - use of computers by children ○ Law enforcement

SRGG
in China
● Research surveys
● Internet-based research
IMPACT OF INTERNET ON MARKETING COST Nature of Business and Ethics
AND AVAILABILITY NATURE OF BUSINESS
● Online Surveys ● Business is as old as human civilization. In
○ Fast the beginning of human existence, men
○ Inexpensive took care of their own needs and wants –
○ Limitations in population coverage hunted animals and cultivated land for
○ Resistance to excessive Web food and clothing.
communications
● As time went on, people became more
● Customer feedback and peer-to-peer Web
proficient in doing one type of work or in
communications
● Monitoring customer Web behavior producing one or several types of goods.
MARKETING MANAGEMENT INFORMATION ● People learned how to continue supplying
SYSTEMS the products or services provided that they
have enough funds or goods to barter in.
● Marketing information systems
● For as long as people have needs and
● Management information systems
wants, there will always be business. Those
● Marketing decision support systems
who have capital will continue to produce
MARKEITNG INTTELIGENCE AND KNOWLEDGE
and sell goods and services that will satisfy
MANAGEMENT
the needs and wants of customers. Business
● Marketing intelligence
is an activity that is part and parcel of
● Knowledge management
human society. Society will not exist
● Role of the chief knowledge officer
without business. Society will not exist
● Leveraging customer knowledge
without business. Since business is an
ETHICAL ISSUES IN COLLECTING AND USING
integral part of society, its activities must
INFORMATION be examined from the ethical perspective. In
● Invasion of customer privacy the same way that society examines
● Information and ethics politics, economics, government, culture,
○ Information collection religion from the moral point of view.
○ Research subjects ● The fundamental reason for examining the
○ Information sharing activities of business from the moral
NEUROMARKETING perspectives is for the promotion of the

common good, protection of the individual’s
interests and the preservation of the human
society in general. Without ethics, business
will be a chaotic human activity because
there will be no common understanding and
agreement about what is the right and
wrong human conduct.
● Business is also a complex enterprise that
involves major activities like purchasing,
manufacturing, marketing, advertising,
selling and accounting. Businessmen deal
with suppliers, customers, workers,
employees and even competitors. Ironically,
it is within this structure of interaction of
people that a lot of questionable practices
occur – misrepresentation, questionable
pricing policies, false advertising,
misbranding, lying, adulteration, unfair
competition, and local pricecutting among
others. The bottom line is, somewhere,
somehow people’s rights are being violated,
their values disrespected and the interest of
the common good disregarded. However, it
is the selfish motive and personal interests
of unscrupulous businessmen that make
business bad and in some instances,
unproductive.
THE IMPORTANCE OF ETHICS IN BUSINESS
● The study of Business Ethics paves the way
for a common ground in our understanding
of the fundamental idea of what is good
and what is bad in our human conduct.
Without ethics, people, especially
businessmen, will set their own moral
standards, moral rules and moral
principles. This would result into a kind of
subjective morality, in which case, what is
good for one may be bad for another and
vise versa.
● Ethics as a science does not only evaluate
the morality of our human conduct but also
provides us with a common understanding
of the universal, objective and irreversible
50
moral principles that should govern our
human behavior and guide our moral
decisions.
● Business ethics opens a novel way of
resolving moral problems and ethical
dilemmas affecting business transactions
and the interaction of people in the
corporate world. The study of Business
Ethics will also enhance the human and
interpersonal skills of managers so they can
be more effective in managing the human
side of the organization.
THE BUSINESSMAN’S MYTHS ABOUT BUSINESS
ETHICS
● Businessmen are not immoral. It is their
wrong perception about the role that ethics
plays in the world of business that affects
his moral judgment and decision making.
Here are some myths that they have about
Business Ethics:
○ MYTH#1 – Ethics is a personal affair
and not a public debatable matter.
– People are entitled to their own
value systems and religious beliefs
but in the exercise of these value
systems, they must also consider
the values and religious
orientations of others. Certainly,
one personal rights are always
limited by the rights of others. The
individual’s moral values may be
very subjective but in the exercise of
this value system, he must also
consider the impact and gravity of
his actions on others.
○ MYTH#2 – Ethics and Business Do
Not Mix. – Since business is part of
human society and its activities
operate within the structure of
beliefs and value systems of people,
it must also be viewed and
examined from the perspective of

ethics. Any business activity that is
devoid of morality will bring more
harm than good to people in
particular, and the society in
general.
○ MYTH#3 – Ethics in Business is
Relative. – Akin to the view that
ethics is a private and subjective
matter is the claim that morality
depends on the person himself and
his environment. This is another
wrong perception on the role that
ethics plays in the world of
business. Some businessmen claim
that morality is relative, which
means, the fundamental concepts of
right and wrong depends on
cultural and religious values of
people. This implies further that
what may be considered a right
action in one country may be
unacceptable in other country. Ex:
Abortion may be legal in Japan but
certainly not in the Philippines.
There are universal moral principles
that people share and agree upon
regardless of religious orientations,
cultural expressions and value
systems.
○ MYTH#4 – GOOD BUSINESS MEANS
GOOD ETHICS – A business may be
profitable but the means of
acquiring profits may be
questionable. The study of Ethics in
business encourages businessmen
and managers to look closely into
the end and the means of doing
business. Profit maximization is a
good end in business but the means
of getting those profits must also be
examined. The end does not justify
the means.
51
○ MYTH#5 – Business is a war. – Some
business leaders believe that
business is a war. Because of this
belief, businessmen often resort to
using predatory tactics to destroy
the competitors in order to emerge
as the market leader. Business is a
good human activity. And as an
integral part of the society, it must
promote healthy competition and
not destroy the competitors.
RELATIONSHIP BETWEEN ETHICS AND BUSINESS
● The concern of ethics as a philosophical
science is to discover that there are
unwritten laws, written in the hearts of
men that should govern our human conduct
where positive laws may be absent, and in
some cases, not very clear.
○ Business is an integral part of
human society. Therefore, the
actions of individuals and
institutions in business must be
subjected to moral rules and moral
evaluation.
○ In business, as in any other human
endeavor, “What is legal may not
necessarily be moral.” People tend
to confuse legality with morality.
An action may be legal but not
necessarily moral.
○ Laws are insufficient. They cannot
cover all aspects of our human
behavior. In the absence of the law,
Ethics will help us to discern the
correct conduct to follow based on
the dictates of conscious and
reason.
○ In today’s technocrat-oriented
business education, the trend is to
train managers to maximize profits

by quantifying the operation of
business. Certainly, the operations
of business must be aided by
quantitative instruments to
measure and predict expected
outcomes. However, this is only one
side of managing the enterprise.
Managers and business leader must
also be prepared to respond to
complex situations bearing ethical
consequences.
○ Peter Drucker argues that “the
business enterprise is an organ of
society and its actions have a
decisive impact on the social scene.
Drucker reminds us that a business
corporation is not just created to
make profits but also to consider its
moral and social obligations to its
stakeholders. Business
organizations should not just look
after their own interests but also
the interests of the common good.
THE GOOD AND BAD SIDES OF PROFIT-MOTIVE:
A. The Good Side of Profit-Motive:
1. Profit-motive motivates people to do
something meaninghful.
2. Profit-motive promotes ingenuity and
cleverness
3. Profit-motive promotes ingenuity & sexual harassment unlawful in the employment,
cleverness in running a business.
4. Profit-motive makes people productive.
5. Profit-motive generates potential capital
for the business.
B. The Bad side of Profit-Motive:
1. Profit-motive promotes rivalry among
competitors.
2. Profit-motive makes people focus only on
making money, that is, to sell as many
goods as possible without considering
whether or not these products satisfy the
needs and wants of customers and end-
users.
52
3. Profit-motive turns the businessman from
being a reflective and a questioning person
because he focuses his attention only on the
practical activity of making money.
4. Profit-motive promotes self-interest rather
than the common good.
Sexual Harassment
A. SEXUAL HARASSMENT AND WORKPLACE
ROMANCE
● Business is a productive human activity
that brings beneficial contribution to both
people and society. Business produces
employment, fair deals, creativity,
advancement of technology, customers’
satisfaction, among others. Ironically,
however, business is also an activity that
provides an opportunity for some
unscrupulous people to take advantage of
others, e.g., the abuse of fiduciary
relationship between employers and
employees and between buyers and sellers.
●
SEXUAL HARASSMENT
✓ An issue in the corporate world that must be
looked into because it can create a hostile and
unhealthy workplace for the employees.
✓ The Congress of the Philippines enacted the
Anti-Sexual Act of 1995 or R.A. 7877 declaring
education or training environment, and other
purposes. “The State shall value the dignity of
every individual, enhance the development of its
human resources, guarantee full respect for human
rights, and uphold the dignity of workers,
employees, applicants for employment, students or
those undergoing training, instruction or education.
Towards this end, all forms of sexual harassment in
the employment, education or training
environment are hereby declared unlawful.”
✓ Republic Act# 7877 defines Sexual Harassment
as, “Employer, employee, manager, supervisor,
agent of the employer, teacher, instructor,
professor, coach, trainor or any other person who,

having authority, influence or moral ascendancy
over another in a work or training or education
environment demands, requests, or otherwise
requires any sexual favor from the other,
regardless whether the demand, request or
requirement for submission is accepted by the
object of said act.” WHY DOES SEXUAL
HARASSMENT OCCUR?
✓ It occurs due to the power struggle between men
and women as a response to a real or imagined loss
of power or as an expression of retaliation or a
flexing of the new power. Historically, sexual
harassment has always occurred but there used to
be no label for such behavior.
✓ As there are increased of women joining the
workforce, sexual harassment occurs. When
harassment is committed by a male against a
female, it may be a response to real or imagined
loss of power. When committed by a woman
towards a man, it may be an expression of
retaliation or flexing of the new power.
TWO TYPES OF SEXUAL HARASSMENT
1. QUID PRO QUO Harassment – means “this for
that” (something for something) and is defined as
requiring a sexual favor or interaction as a
condition of employment or in exchange for an
employment benefit (such as promotion, transfer,
pay raise, and the like).
2. A HARASSMENT THAT CREATES A HOSTILE
ENVIRONMENT - In the hostile environment type of
harassment, abuses include verbal, physical and
visual conducts that create an intimidating,
offensive, or hostile environment in the workplace
that interferes with work performance. This type of
harassment may be based on race, religion,
national origin, sex, age, marital status, veteran
status, sexual orientation, or disability.
Examples of a hostile environment:
a. Unwanted touching, patting, pinching or
brushing up against a person
53
b. Comments about your body, leering,
wolf-whistling, catcalls, insults of a sexual nature,
persistently pestering for a date
c. Displaying or circulation of pornographic
pictures with the intention of harassing
someone/posting of explicitly sexual materials
d. Workplace blackmails, e.g., suggestions
that sexual favors may further your career
(or refusal may hinder it)
e. Green jokes
f. Obscene letters
g. Sexual proposition
h. Suggestive looks
PROFILES OF THE VICTIM AND THE HARASSER
1. The victim as well as the harasser may be
a woman or a man. The victim does not
have to be of the opposite sex.
2. The harasser can be the victim’s
supervisor, an agent of the employer, a
supervisor, an agent of the employer, a
supervisor in another area, a coworker, or a
non-employee.
3. The victim does not have to be the person
harassed but could be anyone affected by
the offensive conduct.
4. The harasser’s conduct must be
unwelcome.
✓ It is helpful for the victim to
directly inform the harasser that the
conduct is unwelcome and must stop. The
victim should use any employer complaint
mechanism or grievance system available.
Although the victim of sexual harassment
and the person accused of sexual
harassment may be peers, more frequently,
the victims are in a position of lesser
position than the accused. Ex: Boss-
subordinate relationship. Harassment also
occurs between customer/client and
providers.

HOW DOES SEXUAL HARASSMENT AFFECT THE
WORKPLACE?
✓ Studies showed that use of
words, jokes and gestures were the type of
harassment which created a hostile
environment or offensive work
environment. It affected the individuals
harassed and the persons accused, who
may be innocent. Such cases can generate
costly lawsuits, unfavorable publicity or
the invasion of privacy. It can also affect
the bottom line of the employer, managers
and co-workers, and affect the entire life of
an organization and its members.
HOW TO PREVENT SEXUAL HARASSMENT IN THE
WORKPLACE
✓ A significant step an organization
can take in preventing sexual harassment
in the workplace is through creating a safe,
secure, and positive work environment by
putting into practice a strong sexual
harassment policy.
COMMUNICATING THE SEXUAL HARASSMENT
POLICY
● The best policy is ineffective if it is
not communicated well. Even if the
company already has a well-written
policy, it is important to expose it
regularly through permanent
posting on bulletin boards, memos,
articles in the organization’s
newsletters, meetings and trainings.
Training programs may come up
with various topics to support the
anti-harassment programs and to
assure each employee of a safe and
harassment-free workplace
environment.
LEGAL PENALTIES OF R.A. 7877
54
● Imprisonment of not less than one
(1) month but not more than six (6)
months.
● Fine of not less than Ten Thousand
Pesos (P 10,000) but not more than
Twenty Thousand (P 20,000).
WORKPLACE ROMANCE
● People at work see each other every day,
work together as teams, sometimes
partners, on specific projects. Through this,
they get a sense of fulfillment and find
encouragement from one another.
Sometimes, people at work get attracted to
each other. Survey says that somewhere
from 25 to 33 percent of the employees at a
given company have had office romances
once in their careers. About three-fourths of
the people in the survey believe that a
romance at the office is acceptable.
However, others believe that is it uncalled
for and unprofessional to mingle romance
with business proposes.
Workplace romance, defined:
➢ A relationship between two people who are
employed by the same organization. It is
characterized by mutual attraction between the
parties and a desire for a personal, romantic
relationship. Workplace romance is very likely to
happen as long as men and women work together.
Though it has been notably increasing in the last
few decades due to the increasing number of
women in the corporate world, it seems that the
workplace has become the perfect venue for dating
people.
➢ Work offers numerous reasons for attractive
social benefits: To be with people with the same
economic, social interest and educational levels;
the chance and moment to get to know each other;
continued intimacy with one another on shared
tasks; the opportunity to share emotional
experiences and the accessibility of information for
background checks.

THE COMPANY’S STAND
✓ The company is trapped in the middle of office
and workplace romances present in the
organization. Top management does not want to
interfere unduly with their employees’ personal
lives and their right for privacy. Conversely, they
don’t want a workplace where employees are
uncomfortable to work. This is why a lot of
companies come up with policies that cover
workplace romances and educate all employees on
the guidelines and effects through training and
seminars.
BENEFITS OF WORKPLACE ROMANCE
✓ Workplace romance offers benefits for the
employees in particular and also for the company
in general:
1. It includes friendship, mutual support to
each other at work and other personal experiences.
2. Employees involved in a love relationship
overcome rough times at work because of mutual
support and inspiration.
3. Employees likewise tend to view work as
fun even when pressures begin to pile up. Romance
becomes the reason to keep their jobs.
DISADVANTAGES OF WORKPLACE ROMANCE
1. Damaged Professional Reputations – It is
wise to be aware of the company policy relating to
office relationships and your organization’s
reaction towards it. If the involvement is between
the boss and a subordinate, then the circumstance
becomes more complicated. Transfer, reassignment,
performance review, relocation, career
advancement & reprimands, and other employees’
opinions and perceptions can be very difficult and
awkward.
2. Disturbed Coworkers – the biggest
concern is the reaction of co-workers and if they
will support the relationship or not. Even if the
relationship is discreet, coworkers will eventually
55
find out what is happening - time is the only
question.
3. Changes in Productivity – the change in
productivity depends on whether their morale is
greatly affected by the relationship. The time spent
on gossiping, attempts to ruin and sabotage the
relationship, and complaints about the relationship
may affect employees’ productivity. It also includes
the aftermath of an office or workplace that did
not work out.
Product Misrepresentation And Caveat
Emptor
MISREPRESENTATION – is observed when there
is a transformation of information to
misinformation.
Two types of misrepresentation:
1. Intentional misrepresentation – a
scenario whereby the person is fully aware or
deliberately misrepresents things, commonly
known as lying.
2. Unintentional misrepresentation – a
scenario whereby the person is not aware and
does not deliberately act on misrepresenting
things. It is a situation where the person
involved believes that it is the right and
acceptable things to do. It is also commonly
called as a white lie.
Definition of Lying:
● It is the act of making others believe
something that they, themselves, do not
believe in. It happens when someone
tries to convince others with untrue
statement. A lie takes place when the
person’s actions are not in congruence
with his thoughts and with the intention
to deceive others.
Types of Lying
1. Use of ambiguous terms: Is the act of
deliberately using vague terms or open-ended

statements that can have several meanings to
mislead people that one is telling the truth.
Statements like: “I was at the office around
8:00 am.” This statement means either before
or after 8:00 am or even worse it is valid until
8:55 am. The point is that the employee is still
late for office. People must be very careful in
using such kind of statements because it can
also be used against them which could entail
another lie.
2. Use of false statements: Is the act of
making a statement from which false
conclusions may be drawn, eventually
misleading others. This type of lying is often
observed in advertising a product to be the
“best-seller” brand. This makes the public
conclude that the brand is also No. 1 in sales
even if this is not true. The use of the term
“fast selling” brand is a statement from which
consumers may draw false inference.
3. Lying through action: Is a type of
lying where the person gets caught in the act
of wrongdoing. A good example of this is when
someone is caught red-handed of stealing and
still denies the accusation.
4. Suppression of correct information: Is
an intentional or unintentional act of hiding
the correct information which eventually
misleads others. This act is sometimes observed
in some crime scenes wherein a witness
conceals the truth from the investigating body
for the sake of his own security or the
unwillingness to be involved in the crime.
➢ According to Catholic moral theology,
lying becomes sinful only when:
1. It leads the neighbor to error;
2. It breaches a promise; and
3. It violates the nature of speech
In general, lying is not a grievous sin. It is
considered grievous only when it becomes
56
gravely detrimental to the neighbor and if it
causes great dishonor to God.
However, lying can be morally justified when it
is:
1. Used to protect innocent people;
2. Used to protect national
security/important secrets;
3. Used in the name of self-defense;
and
4. Used in protection of bodily integrity.
Business Practices Involving Misrepresentation
and Lying:
1. Direct misrepresentation – is
characterized by actively misrepresenting
something about the product or service. It gives
the business a bad name because deception
and lying are used in the process of selling the
product to the customers.
Examples are as follows:
A. Deceptive packaging – The objective is to
create an impression wherein the buyers or the
end users will see an improvement, either by
size or by weight without any change in price.
It can also be done the other way around,
introducing a new packaging and lowering the
price. The concept is to create an illusion and
convince him to believe that the product has
been made better. Ex: floppy-filled packaging
where containers are filled up to 90 percent to
95 percent of its real capacity; Excess package
cushioning is also one of the many techniques
that promote deceptive packaging;
Introduction of a new packaging material of
the same size and price but designed to lessen
the contents of the goods.
B. Adulteration – Is the unethical practice of
corrupting a genuine commodity by imitating
or by adding something to increase its bulk or
volume, or even by substituting an inferior
product for a superior one for the purpose of

profit or gain. It is an unethical practice since it
does not meet the industry standards. It can be
done through repacking.
C. Misbranding or Mislabeling – Is the act of
copying a product’s design to the closest
possible way giving an impression that it is the
same with the leading brand. It is based on the
sole purpose of deceiving the customer as if it
is of superior quality. Ex: placement of tags on
certain products that do not really contain the
advertisement on the tag; The packaging of
alcoholic beverages with almost similar design
to blend in the competition; Changing the
quality or quantity of the product but not
changing the label to conform to the change;
Claiming inferior products as superior ones by
placing them in containers of well-known
brands, supports the concept of repacking
D. Short-Weighing – the most common type of
direct misrepresentation. It can be easily
spotted in wet and dry markets. Weighing
scales are easily tampered by intentionally
offsetting the calibration of the dials. It is
practiced in selling products by manufacturers
packing products in bulk.
E. Short-Changing – is taken directly from a
situation where the seller gives the customer
less than the change he should get. When the
buyer receives less than what should be taken,
the buyer is being shortchanged. On the
quality of the product, a buyer who pays for a
brand new phone and receives a reconditioned
phone is also being shortchanged.
F. Short-Measuring – Is an unethical practice
observed in products that depend on length
and/or volume. The meter stick or standard is
shorter than the real length or smaller in
volume than the standard. It is sometimes
observed in textile markets and electrical
shops.
57
G. Short Numbering – The seller gives the
consumer the quantity by piece of the product
less than the number he has paid for. It is often
practiced when the product being sold comes or
is packed in a manner that would make
counting difficulty or inconvenient for the
consumer. Ex: products sold by box or package
such as toothpicks, bond paper, toiler paper,
paper clips, matchsticks and paper towel.
H. Misleading Advertising – The term “false”
means any representation or symbol that is
inconsistent with facts, and where the
deviation would be unacceptable to a
significant number of the misunderstandings or
incorrect decisions. The term “misleading”
means any representation or symbol that
would cause a significant number of the
general or relevant public to misunderstand or
make incorrect decisions, regardless of whether
such representation or symbol is consistent
with facts.
2. Indirect misrepresentation – is characterized
by omitting adverse information about the
product or service. It is passive deception and
not as obvious compared to direct
misrepresentation. But it still contributes to the
impression that businessmen are liars and are
out to make quick money. It includes caveat
emptor and business ignorance.
➢ Indirect misrepresentation is
purposely done so that the product or service
maintains its good image by deliberately
omitting adverse information about the
product or service to mislead customers into
thinking that the product is reliable and
durable and practically problem-free. The
following are the common practices involved in
indirect misrepresentation:
A. Caveat Emptor – means “Let the buyer
beware” and is a practice very common among
 58

salesmen. Based on this concept, it is the that does not know its real costs may charge
responsibility of the consumer to determine for such a high price and further burden the
himself the defects or negative features of the costumer who is already reeling from the
product. Therefore, it is not the responsibility continuing blows of inflation. It may even price
of the seller to reveal any defect of the product itself out of the market and not sell at all.
he is selling. Thus, the costumer cannot expect Introduction
the seller to voluntarily provide that kind of
Understanding the foundation of the business
information.
ethics is very important to every decision
B. Deliberately withholding information in any
makers and members of the corporate
business transaction is also an unethical
organization. Easy resolution can be created
practice. – All parties should involved in all
and cautiousness for possible repetitions of
business transactions must know exactly what
ethical issues can be observed and examined.
they are giving away or receiving in return, in
In this chapter, we aim that you would
order to be fair. Honesty must always be
understand and learn the principles of business
observed in any business transaction. It is clear
ethics as a part of our social responsibility and
that an agreement for purchase and sale is fair
to embody the good corporate governance.
only if both parties are aware of all facts
ETHICS DEFINED
relating to what they are offering and/or
ETHICS is derived from the Greek word
receiving in return.
“ethikos” which means “having to do with
C. Business ignorance is a form of passive
character. The Latin word for ethos is “mos” (or
deception because the businessman is unable
“mores”). That is why we known Ethics as the
to provide the customer with the complete
Moral Science or Moral Philosophy. It refers to
information he needs to make a fair decision. It
the theory of morality of right conduct.
is the duty of the businessman to know the
BUSINESS ETHICS refers to the standards for
nature of the product he is selling, the goods in
morally right and wrong conduct in business.
the market and what goods are really the best
Law partially defines the conduct, but “legal”
at what price.
and “ethical” aren't necessarily the same.
D. Ignorance of costs – the cost of
Business ethics enhances the law by outlining
manufacture, the cost to sell, and the
acceptable behaviors beyond government
attendant administrative costs, is another form
control
of business ignorance which is just as harmful
COMMON CHARACTERISTICS THAT CONSTITUTE
and inexcusable as ignorance of the product
AN ETHICAL PERSON
one is selling. A company which does not know
o Wisdom. The ability to discern right from
its costs may sell at a price lower than the
wrong. Though it cost all you have, get
costs of manufacturing the product and
understanding.
bringing it to the market. The company may
o Courage. It is defined as the ability to
then become a menace to other similar
withstand and defend one’s decisions. It is to
companies in that it may force them to sell at
accept things we (I) we cannot change.
below cost, making the whole industry
unprofitable. At the other extreme, a company

o Temperance. It is defined as the ability to
control oneself and keeping proper decorum
even in the hardest situation.
o Justice. It is known as the act of fairness;
being impartial or having no bias,deciding for
the sake of common interest of the
stakeholders.
o Conscience. It refers to the practical judgment
of reason upon act as good.
Types of Consience
1. Antecedent Conscience is a judgment before
an action is done.
2. Consequent Conscience is a judgment after
an action is done.
3. True Conscience is a conscience which judges
thing truly as they are.
4. Erroneous Conscience is known as the false
conscience.
5. Certain Conscience is a subjective certainty
of the legality of particular actions.
6. Doubtful Conscience happens when a person
is not certain about a judgment.
7. Scrupulous Conscience is one which sees
wrong where there is none. 8. Lax Conscience is
one where it fails to see wrong where there is
wrong.
FACTOR INFLUENCING BUSINESS ETHICS
o Leadership. Leaders is a person who leads the
people towards achieving a common goal.
Leader can be good or bad, great or small they
arise out of needs and opportunities of a
particular time and place. Leaders should be
the role models and mentors to its
subordinates to attain progress and not
became examples of disgrace and mentors of
regress in work.
o Performance and Working Environment.
Good performance creates motivation to the
subordinates to work harder. The working
environment must possesses the energy of
59
being productive in order for all to flow
properly. If the working environment possesses
a weak or feeble performance, the workers
started to be lazy and not concentrated to the
work resulting of being not productive.
o Deontology. The philosophy that says people
should meet their obligations and duties when
analyzing an ethical dilemma. This means that
a person will follow his/her obligations
because upholding one‟s duty is what is
considered ethically correct.
o Legal Rights. It includes freedom of religion,
speech and assembly, protection from improper
arrest, searches and seizures, proper access to
counsel, confrontation of witnesses, cross-
examination in criminal prosecutions, right to
privacy in many matters and rights applied
without regard to race, color, creed, gender, or
ability.
CHARACTERISTICS OF ETHICAL ORGANIZATION
o Ethical Organization are based on the
principles of fairness.
o All stakeholders are treated equally without
any discrimination.
o Benefit of stakeholder in given precedence
over own interest.
o There is a clear communication in an ethical
organization.
o What is to be done, how it is to be done is
clearly stated.
o No bureaucracy.
o Minimum bureaucracy and high control helps
in implementing business ethics.
o Compliance with applicable laws.
BENEFITS OF BUSINESS ETHICS
o Goodwill of the People. People like to build
long term relationships with organizations that
performs their tasks on the principle of ethics.
Moreover, strong public image leads to
continual loyalty and attracts new investors.

o Prevention from Legal Actions. By
implementing ethical practices, organizations
are automatically prevented from illegal and
objectionable activities as business ethics
instruct to avoid all that is wrong and evil.
Such organization have no fear of legal action
and social boycott.
o Business Ethics have Substantially Improved
the Society. Establishment of anti-trust laws,
unions and other regulatory bodies has
contributed to the development of the society.
o Ethical Practices Create Strong Public Image.
Organization with strong ethical practices will
possess a strong image among the public. This
image would lead to strong loyalty.
o Ethical Practices Support Employees’ Growth.
Ethics in the workplace help employee face
reality, both good and bad – in the
organization.
o Strong Teamwork and High Productivity.
Constant change and dialogue will ensure the
employee matches to the value of the
organization.
o Build Trust with the Key Shareholders.
Implementation of ethics helps organization to
gain trust of their shareholders.
o High Profit. Reputation of the company and
its share prices also increase if the company act
upon Corporate Social Responsibility (CSR).
FOUR VIEWS OF ETHICS
1. Utilitarian View. ethical decisions are made
solely on the basis of their outcomes or
consequences. Greatest good is provided for the
greatest number. And encourages efficiency
and productivity and is consistent with the
goal of profit maximization.
2. Moral Right View. they are more in the
respecting and protecting the fundamental
rights of the people. Moral decisions are those
that best maintain the rights of those people
60
affected by them. An ethical decision is one
that avoids interfering with the fundamental
rights of other.
THE SIX MORAL RIGHTS OF AN INDIVIDUALS:
o The right of free consent o The right of
privacy
o The right of freedom of conscience o The right
of free speech
o The right of due process
o The right of life and safety
3. Justice View: there is always fair and
impartial treatments of people according to the
legal rules and standards. The decisions to be
created are based to the standard of Equality,
Fairness and Impartiality.
THREE TYPES OF JUSTICE APPROACHES:
o Distributive Justice: the treatment of people
should not be based on arbitrary
characteristics. In case of substantive
differences, people should not be treated
differently in proportion to the differences
among them.
o Procedural Justice: the rules must be or
should be clearly stated; equal and just for
everyone. All the rules approved should be
consistently and impartially enforced for the
betterment of the workplace.
o Compensatory Justice: the individuals should
be compensated for the cost of their injuries by
the party responsible. Individuals should not
be held responsible for matters they have no
control.
4. Individualism View. the acts when they
promote the individual‟s long term interests,
which ultimately leads to the greater goods.
Individual self-direction paramount;
individuals is believed to lead to honesty and
moral integrity since the Accounts Receiver. Is

the primary documents is to one‟s long term is
like one‟s long term self-receipt.
The Morality of Advertising
ADVERTISING
● Plays a very significant role in
marketing goods and services.
Without advertising, the consumers
would not be aware of the presence
of diverse products and services
available in the market. Sometimes,
even the mere presence of
advertising can sell a product due to
consumer perception that a heavily
advertised product is a product of
“good value.”
ADVERTISING, defined
● Philip Kotler defines it as “any paid form of
non-personal presentation and promotion
of ideas, goods or services by an identified
sponsor.”
● Wells, Burnett and Moriarty, likewise
defined advertising as “paid, non-personal
communication from an identified sponsor
using mass media to persuade or influence
an audience.”
PRIMARY PURPOSE OF ADVERTISING
• To inform potential buyers of the availability of a
certain product by providing relevant information
on its uses, benefits and how it might serve the
needs and wants of individuals.
➢ The use of advertising today has not
been serving its intended purpose since very little
information is conveyed to consumers and more
often the information is not even useful.
Advertising is part of the selling process and its
goal is to persuade consumers to buy the products
being advertised. The economic system is
characterized by high degrees of business
competition where every producer would want to
have a piece of the consumer’s demand; as a result,
61
advertisements typically end making
misrepresentations or false claims.
➢ From the point of morality, advertising in
itself is not bad or immoral since it helps achieve
the goals of both the seller and buyer. It only
becomes immoral when, in the attempt to persuade
consumers, the advertisements become deceptive,
misleading, and manipulative. Since the primary
function of advertising is to sell goods, its purpose
should not be limited to supplying consumers with
appropriate information but it should also educate
the public or mold the public’s opinion in choosing
products that they need and not become
manipulated in buying what they do not need.
➢ There is only one criterion in evaluating
the morality of advertising, and that is “to tell
truth.” An advertisement that conveys truthful
information is morally permissible. If an
advertisement contains false statements and lies,
then it is said to be immoral.
➢ Advertising becomes unethical when the
advertisement becomes:
1. Misleading – do not misrepresent, do not make
false claims but it makes claims in such a way that
a normal person looking at it comes up with the
wrong conclusion.
2. Deceptive – makes a false statement or
misrepresent the product, e.g. , the picture
presented in the advertisement is different from the
actual product;
➢ Deceptions may occur not only through
sentences or propositions but also through pictures,
individual words, or through certain combinations
of objects which can deceive the eye and mind.
➢ Semantics in advertising is also allowed
in some conditions to allow certain leeway in some
products. In the case of cosmetics, since it is
considered as luxury items, consumers expect
various cosmetics to be packaged in attractive
bottles, boxes or containers for aesthetic purposes.
This is also true with shampoo, hair conditioners,
and lotions. Using these products does not
guarantee that an ordinary person will look like

the models pictured in the ads. Most people
understand the semantics in advertising and do not
take the implied claims of the products literally.
➢ Another deceptive technique in
advertising is ambiguity. When ads are ambiguous,
they are considered deceptive. The use of weasel
words is often complementary to ambiguity in
advertising. Weasel words are used to avoid or
recoil from a direct or straightforward statement.
Example: the word “help” which means to aid or
assist. According to one author, the word help has
been generally used to say something that couldn’t
be said. We are usually accustomed to ads that
contain phrases like: helps fight, helps prevent,
helps stop, helps you feel, helps overcome, helps
you look. Other commonly used weasel words are:
like, virtual or virtually, can be, up to, as much as,
and many other words that are used to imply what
can’t be said.
➢ Consumers might also be misled through
exaggeration. Exaggeration occurs when
advertisements tend to make false claims of the
benefits of the goods or services which is actually
unsupported by valid evidence. Ex: claims that a
pain reliever provides “extra pain relief” or is “50
percent stronger than aspirin”.
➢ Advertisers play on several different
tactics to get people interested in their products.
There are some advertisements that are directed at
arousing human emotional needs rather than
reason. This is one area in advertising that presents
a serious moral concern. Some of the psychological
appeals that advertisers use to motivate people to
buy products are: Power, prestige, personal
enjoyment, masculinity, femininity, curiosity,
imitation, acceptance, approval, self-esteem, self-
preservation, altruism, and the most pervasive of
all are sexual pitches.
3. Manipulative or Coercive – manipulative
advertisement uses trickery or by devious or
insidious means. Coercive advertisement involves
the use of force or threat, either physical or
psychological.
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ADS DIRECTED AT CHILDREN
• Most advertisers have recognized that advertising
to children is effective and eventually became a big
business recently. Ads are reaching children
through new media technologies and even in
schools – with corporate-sponsored educational
materials and product placements in students’
textbooks. The aim of advertisers is for the children
to pester their parents to buy things for them.
Young children are naïve and gullible and are
particularly vulnerable to enticements made by
advertisements.
PHILIPPINE LAWS ON ADVERTISING
CONSUMENT ACT OF THE PHILIPPINES (R.A. 7394) •
Article 108 of the Act declares that “The State shall
protect the consumers from misleading
advertisements and fraudulent sales promotion
practices.” The Department of Trade and Industry is
responsible for enforcing the provisions of the Act.
With respect to food, drugs, cosmetics, devices and
hazardous substances, the Department of Health is
the agency that oversees these products.
Introduction To Internation Business
What is International Business?
● The exchange of Goods & Services,
Resources, Knowledge, & Skills, among
individuals & businesses in two or more
countries.
● Transaction that are carried out across
national borders to satisfy the
objectives of individuals and
organization
● All Commercial transactions that take
place between two or more countries.
○ Private & Government
○ Sales
○ Investments
○ Logistics
○ Transportation
Nature
● Accurate Information & timely
 63

● The size of the international business • Under this approach, the company operating
● Market segmentation successfully in a foreign country thinks of
● International markets have more exporting other neighboring countries of the
potential than domestic markets host country.
Scope • At this stage, the concerned subsidiary
● International Marketing considers the regional environment ( such as
● International Finance and Investments laws, culture, policies etc.) for formulating the
● Foreign Exchange policies & strategies.
● Global HR Geocentric approach
• Under this approach, the company analyses
Features the tastes, preference and needs of the
● Large scale operations customers in all foreign markets and then
● Integration of economies adopts a standardized marketing mix for all
● Dominated by developed countries and the foreign markets.
MNCs Problems
● Benefits to participating countries • Political factors
● Keen competition • High foreign investments and high cost
● Special role of science and technology • Exchange instability
● International restrictions • Entry requirements
Importance • Tariffs, quota etc.
1. Earn foreign exchange • Corruption and bureaucracy
2. Optimum utilization of resources • Technological policy
3. Achieve its objectives • Quality Management
4. To spread business risks Entry Strategy
5. Improve organization's efficiency 1. Exporting
6. Get benefits from Government • Indirect & Direct
7. Expand and diversify 2. Licensing
8. Increase competitive capacity • Agreement
Approaches of IB • Patent, trademark, copy right,
Ethnocentric approach technology, production processes, and
● Under this approach, target market is product
own country , Excessive production will • licensee’s fee
export due to change in customer taste, 3. Franchising
preferences • by franchisers to franchisee
Polycentric approach • Usage
● Under this approach, the companies 4. Foreign Assembly
customizes the marketing mix to meet • Subsidiary
the taste, performance and needs of the • local assembly
customers of each international market/ 5. Turnkey Operation
Regiocentric approach • Staff of an operating facility
 64

• foreign buyer • Lower Governmental barriers to the

6. Foreign production subsidiary
• Establishment
• Purpose
7. International Firm
• Significant portion
• In foreign countries
8. Multinational Corporation
• Parent country
• host country
9. Joint Venture
• Property rights
10. Foreign Direct Investment
• Arrangement in which a firm buys or
establishes tangible assets
• In another country
• Through direct investment
• By buying a company stock in capital
markets
Advantages
• Faster growth
• Access to cheaper inputs
• Increased quality and efficiency
• New market opportunities
• Diversification
Disadvantages
• Increased costs
• Foreign regulations and standards
• Delays in payments
• Complex organizational structure
Reason for recent growth in IB
1. Expansion of technology
2. Business is becoming more global because
• Transportation is quicker
• Communications enable control from
afar
• Transportation and communications
costs are more conducive for international
operations
3. Liberalization of cross-border movements
movement of goods, services, and resources
enable Companies to take better advantage of
international opportunities
General agreement on Tariff and trade (GATT)
● An international organization formed to
reduce or eliminate tariff and other
barrier to international trade
International Monetary Fund (IMF)
● An international financial organization
that lend money to countries in
conducting international trade
World Bank
• An international financial organization that
lend money to underdeveloped and developing
countries for development
Economic Communities
• World Trade Organization (WTO)
• European Community (EC)
• North American Free Trade
Agreement(NAFTA)
• Asian Free Trade Agreement (AFTA)
Entry Strategies International Business Entry
Strategies
• Market entry strategy is influenced by the
firm and product characteristics and the
domestic and international market
characteristics.
Foreign Market Entry and Operations
Strategies
Exporting
• Direct Exporting.
• Indirect Exporting.
Contractual Agreement
• Licensing & Franchising.
• Strategic Alliance.
• Contract Manufacturing.
Production facility in foreign market.
• Assembly Operations.

• Wholly owned manufacturing facility.
• Joint Ventures.
Mergers and Acquisitions
Direct exporting
In direct exporting, the firm becomes directly
involved in marketing its products in foreign
markets, because the firm itself performs the
export task (rather than delegating it to
others).
To implement a direct exporting strategy, the
firm must have representation in the foreign
markets. This can be achieved in a number of
ways:
– Sending international sales representatives
into the foreign market.
– Selecting local representatives or agents to
prospect the market.
– Using independent local distributors who will
buy the products to resell them in the local
market.
– Creating a fully owned commercial
subsidiary to have a greater control over
foreign operations.
Indirect exporting
The market-entry technique that offers the
lowest level of risk and the least market
control is indirect export, in which products are
carried abroad by others. The firm is not
engaging in international marketing and no
special activity is carried on within the firm;
the sale is handled like domestic sales Indirect
exporting
There are several different methods of indirect
exporting:
– The simplest method is to deal with foreign
sales through the domestic sales organisation.
– A second form of indirect exporting is the use
of international trading companies with local
offices all over the world.
65
– A third form of indirect exporting is the
export management company located in the
same country as the producing firm and which
plays the role of an export department.
Example The mumbai based American Dry
Fruits (ADF) which began selling a range of
packaged foods liked Chutneys, Spices, Canned
vegetables, ready to eat dals, etc under
different brand names later moved to other
countries with large Indian population.
Licensing & Franchising
Licensing is another way to enter a foreign
market with a limited degree of risk. Under
international Licensing, a firm in one country
permits a firm in another country to use its
intellectual property( Patents, trade marks
etc).
Franchising is a business model in which many
different owners share a single brand name. A
parent company allows entrepreneurs to use
the company's strategies and trademarks; in
exchange, the franchisee pays an initial fee
and royalties based on revenues. The parent
company also provides the franchisee with
support, including advertising and training, as
part of the franchising agreement.
Licensing is similar to franchising except that
the franchising organisation tends to be more
directly involved in the development and
control of the marketing programme.
The major drawback of licensing is the problem
of controlling the licensee due to the absence
of direct commitment from the international
firm granting the licence. After few years, once
the knowhow is transferred, there is a risk that
the foreign firm may begin to act on its own
and the international firm may therefore lose
that market.

Example ITC Hotels and ITT Sheraton
corporation had an agreement under which ITC
Hotel’s Welcom group franchised two of its
hotels in Bangkok and Hong kong to ITT
Sheraton holding, in exchange, the franchise
for Sheraton in India. Later, partners decided to
set up a joint venture with Sheraton having
major stake to manage all new ITC hotel
projects in India.
Strategic Alliance
It is an arrangement between two companies
that have decided to share resources to
undertake a specific, mutually beneficial
project. A strategic alliance is less involved and
less permanent than a joint venture, in which
two companies typically pool resources to
create a separate business entity.
In a strategic alliance, each company
maintains its autonomy while gaining a new
opportunity. A strategic alliance could help a
company develop a more effective process,
expand into a new market or develop an
advantage over a competitor, among other
possibilities.
Example An oil and natural gas company
might form a strategic alliance with a research
laboratory to develop more commercially
viable recovery processes. A clothing retailer
might form a strategic alliance with a single
clothing manufacturer to ensure consistent
quality and sizing. A major website could form
a strategic alliance with an analytics company
to improve its marketing efforts.
Contract Manufacturing
In contract manufacturing, the firm’s product is
produced in the foreign market by local
producer under contract with the firm. Because
the contract covers only manufacturing,
marketing is handled by a sales subsidiary of
the firm which keeps the market control.
66
Contract manufacturing obviates the need for
plant investment, transportation costs and
custom tariffs and the firm gets the advantage
of advertising its product as locally made.
Contract manufacturing also enables the firm
to avoid labour and other problems that may
arise from its lack of familiarity with the local
economy and culture.
Example Balsara’s private label manufacturing
activity is focused on the supply of children’s
toothpaste formulations. Balsara’s empahsis
on Private lable products and contract
manufacturing has resulted in increased
business from North American and European
Markets.
Assembly Operations
Assembling is a compromise between exporting
and foreign manufacturing. The firm produces
domestically all or most of the components or
ingredients of its product and ships them to
foreign markets to be put together as a
finished product.
By shipping CKD (completely knocked down),
the firm is saving on transportation costs and
also on custom tariffs which are generally
lower on unassembled equipment than on
finished products. Another benefit is the use of
local employment which facilitates the
integration of the firm in the foreign market.
Example Notable examples of foreign assembly
are the automobile and farm equipment
industries. In similar fashion, Coca-Cola ships
its syrup to foreign markets where local bottle
plants add the water and the container.
Wholly owned manufacturing facility
Companies with long term and substantial
interest in the foreign market normally
establish wholly owned manufacturing
facilities there. A number of factors like trade
barriers, difference in the production and other

costs encourage the establishment of
production facilities in the foreign markets.
Joint Ventures
Foreign joint ventures have much in common
with licensing. The major difference is that in
joint ventures, the international firm has an
equity position and a management voice in the
foreign firm. A partnership between hostand
home-country firms is formed, usually
resulting in the creation of a third firm.
Mergers and Acquisitions
From a legal point of view, a merger is a legal
consolidation of two companies into one entity,
whereas an acquisition occurs when one
company takes over another and completely
establishes itself as the new owner
Regional Economic Integration
● Regional Economic Integration
(REI) refers to the
○ commercial policy of
discriminatively reducing or
eliminating trade barriers only
between the states joining together.
● Regional economic groups eliminate or
reduce trade tariffs
○ (and other trade barriers) among
the Partner States while
○ maintaining tariffs or barriers for
the rest of the world (non- member
countries).
● Geographical proximity, cultural, historical,
and ideological
○ Similarities, competitive or
complementary economic Linkages,
and a common language among the
Partner States are importantly
required for effective economic
integration.
The aim of economic integration is to lessen costs
for both consumers and producers, in addition to
increase trade between the countries taking part in
the agreement.
primary economic objective of integration is to
raise:
- real output and income of the
participants & rate of growth
67
- by increasing specialization and
competition
- by facilitating desirable
structural (linkages) changes.
Increase of Trade.
A simple constituent of economic integration
policies is elimination of the additional payments
or tariffs, making trade low- priced and giving
exporters a superior incentive to do business with
integrated economies.
Allowing Consumers to Spend More.
Economic integration reduces or eliminates
customs duties, which in turn results in cheaper
imported products for consumers.
This way, the purchasing power of consumers
grows, and with it, activity in the market.
The public can start buying more imported
products or spend former duty expenses on other
products or services.
In addition, goods that are not produced in
sufficient quantities in one country can be
imported and distributed in the market at low cost.
INCREASE OF TRADE
A simple constituent of economic integration
policies is elimination of the additional payments
or tariffs, making trade low- priced and giving
exporters a superior incentive to do business with
integrated economies.
MOVEMENT OF CAPITAL
The benefit of capital movement is the investment
in new markets, leading to their eventual
development
Economic integration removes barriers to foreign
investors, minimizing or abolishing extra tax,
while advanced integration policies, such as a
monetary union, can even eliminate the cost of
currency exchange
ECONOMIC COOPERATION
When economies within the integrated the duty of
members to help, not only as a moral obligation,
but because a failing economy can have serious
effects on the whole integration process.
For this reason, European Union countries have
offered to bail out the troubled economies of
Greece, Ireland and Portugal
SIMPLE FORMS OF REGIONAL
INTEGRATIONBILATERAL INVESTMENT TREATY (BIT)
- A bilateral investment treaty (BIT) is an
agreement establishing the terms and conditions
for private investment (FDI) by nationals and
companies of one state in another state.
BITs are established through trade pacts.

TRADE & INVESTMENT FRAMEWORK AGREEMENT
(TIFA) - A trade pact between countries that seeks
to develop the necessary structures or
frameworks, such as committees and trade
councils, that will move the trading countries
closer to a free trade agreement.
It is a form of economic integration.
FREE TRADE AGREEMENT (FTA) - A free-trade area
is the region encompassing a trade bloc whose
member countries have signed a free-trade
agreement (FTA). Such agreements involve
cooperation between at least two countries to
abolish or reduce trade barriers – import quotas
and tariffs – and to increase trade of goods and
services with each other.
CUSTOMS UNION A customs union is a type of
trade bloc which is composed of a free trade area
with a common external tariff.
The tariffs are then shared among members
according to a prescribed formula.
COMMON MARKET
Members of a common marketremove barriers to
trade in goods and services among themselves,
establish a common trade policy with respect to
non-members (common external tariff) and
remove restrictions on the movement of factors of
production (labor, capital, Land& entrepreneur)
across borders
Restrictions on immigration, emigration, and cross-
border investments are abolished.
Members cooperate closely on monetary, fiscal,
and remove barriers to trade in goods and services
among themselves; establish a common trade
policy with respect to non- members (common
external tariff); remove restrictions on the
movement of factors of production (labor, capital,
and technology) across borders; and Coordinate
their economic policies (monetary, fiscal, taxation,
and social welfare) so as to blend their economies
into a single entity.
POLITICAL UNION
Remove barriers to trade in goods and services
among themselves;
Establish a common trade policy with respect to
non-members (common external tariff);
Remove restrictions on the movement of factors of
production (labor, capital, and technology) across
borders; and
Coordinate their economic policies (monetary,
fiscal, taxation, and social welfare) so as to blend
their economies into a single entity.
68
It involves the unification of previously separate
states.
WHY MOST OF THE REI’S IS FORMED IN SAME
REGION?
Most trade groups contain countries in the same
area of the world (although not necessarily), for
the reasons that,
The distance that goods need to travel between
such countries is short and consumers’ tastes and
preferences are likely to be similar,
Distribution channels can be easily established in
adjacent countries resulting in reduced distribution
cost.
Another reason is that the neighboring countries
may have a common history and interests, and
they may be more willing to coordinate their
policies.
FORCES / MOTIVATIONS OF REI
Degree of integration depends upon the
willingness and commitment of independent
sovereign states to share their sovereignty.
Economic aspects and political aspects as the main
motives of economic integration.
ECONOMIC ASPECTS/FORCES THAT MOTIVATES
REGIONAL ECONOMIC INTEGRATION
Reducing uncertainties
Improving credibility
Thus making it easier for the private sector to
plan and invest.
ECONOMIC EFFECTS OF REGIONAL INTEGRATION
1. Trade Creation
2. Trade Diversion
TRADE CREATION
Trade creation occurs when common external trade
policy and internal free trade lead to a shift in
production from high to the low cost Partner State
in the community.
TRADE DIVERSION
Trade diversion on the other hand arises when
imports from the rest of the world are replaced by
more expensive imports from the partner country.
The overall gain depends on whether trade creation
is larger than trade diversion.
POLITICAL ASPECTS/FORCES THAT MOTIVATES
REGIONAL ECONOMIC INTEGRATION
Many regional economic communities have been
driven by political rather than economic goals.
These political objectives include,
1.National Security
2.Structure of Governance : Macroeconomic Policies
3.Democracy
4.Human rights.
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NATIONAL SECURITY advantage in each member states which in turn

Regional economic integration can enhance will lead to specialization which will further lead
security because it increases the level of trade to increased output and services thus making the
between member countries and, in so doing, whole region better off as a result of such
increases familiarity between the people of the specialization scheme.
member countries and lessens the degree of NEED FOR REGIONAL ECONOMIC INTEGRATION IN
misconception. DEVELOPING
It can also be a means through which democracy To promote a balanced division of labor among a
and governance objectives can be pursued and to group of countries.
lock in changes in political institutions. To achieve Economies of Scale.
It may also worsen security and this is likely to Isolated tiny national economies has to give way
happen where the distribution of transfers is to strategic alliances that harness knowledge and
asymmetric between the member states. resource based comparative advantages through
BENEFITS OF REGIONAL ECONOMIC INTEGRATION integration.
Regional Economic Integration offers many One of the major problems developing countries
benefits to the participating member countries. face is the formulation and implementation of
However, these benefits are not pre-determined good macro economic policies. Consequently, these
and they depend among other things on the countries have experienced instability in their
internal design of the integration including the macroeconomic environment and thus regional
degree of political commitments by the Member integration can help them to harmonize their macro
States. policies, including fiscal and monetary policy and
An important feature of the higher levels of to achieve a stable macroeconomic environment
economic integration is free trade among members within the integrated economies.
and this free trade is expected to lead to a rapid
increase of trade which in turn is likely to lead to
rapid economic growth.
These gains result from the dynamic effects of
integration which are cumulative in nature and
lead to growth.
The dynamic effects of integration are often
described as the long-run consequences of
economic growth of member states as a result of
increased market size exploitation of economies of
scale increased competition learning by doing
increased investment.
The larger the integration (in terms of the
size) the more likely it is to lead to growth
since the larger the integration, the larger the
market created and so on. Also, the stronger the
potential economies of scale are, and the more
rapid the autonomous productivity advances,
the more likelythe integration will lead to growth.
economic integration can also serve as incentives
for investment and attraction of Foreign Direct
Investment (FDI).
General reforms such as stabilization, market
liberalization, and privatization adopted under
regional arrangements can raise returns to all
factors and are likely to be more than enough to
increase private investment.
Economic integration can help to ensure that
production is located according to comparative