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MODULE 1. Principles of Marketing
MODULE 1. Principles of Marketing
In this subject, you will learn about the marketing process and examine the range of marketing decisions that
an organization must make in order to sell its products and services. You will also learn how to think like a marketer,
discovering that the focus of marketing has always been on the consumer. You will begin to think about who the
consumer of goods and services is, what the consumer needs, and what the consumer wants. Marketing is an
understanding of how to communicate with the consumer, and is characterized by four activities: creating products and
services that serve consumers, communicating a clear value proposition, delivering products and services in a way that
optimizes value, and exchanging (or trading) value for those offerings.
This will highlight key concepts and identify the essential questions, show the big picture, connect and/or
review prerequisite knowledge, clearly communicate learning competencies and objectives and motivate through
applications and connections to real-life.
Welcome! You are now part of the class taking up Principles of Marketing. Many people incorrectly believe that
marketing and advertising are the same. In reality, advertising is just one of many tools used in marketing, which is how
firms determine which products to offer, how to price those products, and who they should be made available to. By
the end of this course, you will be familiar with the art and science of marketing a product.
The primary concern of this module is to be able to teach Principles of Marketing effectively using
developmentally appropriate classroom practices. This module will help you understand and interpret certain issues
about marketing principles and strategies. It will also help you in understanding the concepts and information about
different marketing approaches. It covered important topics and activities that will enhance your critical thinking skills
in doing the Strengths-Weaknesses-Opportunities-Threats (SWOT) analysis.
This module presents a systematic program of study intended for Senior High School (SHS) students of
Principles of Marketing in the K to 12 program. It maintains a consistent link between theory and practice by providing
learning activities to illustrate and test theoretical ideas. As you go through the different lessons, you will be able to
understand the different concepts and information about the goals of marketing, customer service, developing the
marketing mix and managing the marketing effort.
Introduction
Table of Contents
Introduction …………………………………………………………………….…………………………………...……1
Objectives ………………………………………………………………………………………………………...………..2
Pre-Test ……………………………………………………………………………………………………………………….………..3-4
References …………………………………………………………………………………………………………………………...14
Introduction
Some of you may believe that you already have some idea about what marketing is all about. That is good. Our
purpose here is to build up and work with what you know, so that we can integrate everything into a clear and cohesive
framework that maps out what marketing is really all about. To a layman, marketing will indeed be all about selling a
product. But to a marketing professional, marketing is a process. It is a process that begins right at the moment when
an aspiring entrepreneur or business development manager (or marketing manager) realizes that there is an
opportunity to build up a business. Marketing is also about communication. In fact, there is a trend toward using the
term “marketing communications” rather than just “marketing”. This reflects the fact that selling a product is really all
about properly communicating that product to the market and to the world at large. It will, therefore, help to keep this
in mind as we proceed throughout this lesson.
Description of Module
Lesson 1 focuses on the marketing principles, goals, and traditional and contemporary approaches to
marketing. This lesson also focuses on plotting marketing goals and approaches for product or service.
General Instructions
At the start of the module, you are to take the pre-test to see how much background information and knowledge
you have about the topics to be discussed.
This module is self-instructional. You can read, analyze concepts and ideas presented, and reflect on them. The
Activities and Self-Check will help you assess how you progress as you go through the module.
Your answers to the Self-Check and Activities will be evaluated by your teacher. These will be part of your
formative evaluation.
The post test will be given in a separate booklet upon completion of this module. It will serve as the summative
evaluation of your performance.
Work on this module independently. Your teacher will not be around to supervise you as you go through each
lesson. It is expected that you will make the most of it.
MULTIPLE CHOICE
Directions: Read the statements carefully and choose the letter of the correct answer. (1/4 sheet of paper)
5. _____________ are the form human needs take as they are shaped by culture and individual personality.
A. Wants C. Self concepts
B. Demands D. Desires
6. Marketing seeks to create and manage profitable customer relationships by delivering ___________ to customers.
A. Competitive prices C. Superior service
B. Superior value D. Superior promotion
7. The marketing manager at Sunshine Car Washes is holding a training session for new employees. She stresses
that perhaps the most important concept of modern marketing is ____________.
A. Customer relationship management C. A quality Website
B. E-mail advertising D. Properly trained sales people
10. The two-fold goal of marketing is to attract new customers by promising superior value and to ____________.
A. Keep and grow current customers by delivering satisfaction
B. Keep and grow current customers by delivering competitive pricing
C. Keep and grow current customers by delivering friendly service
D. All of the above
Activity 1.1
Definition of Marketing
According to the American Marketing Association:
“Marketing is the activity, set of institutions, and processes for
creating, communicating, delivering, and exchanging offerings that
have value for customers, clients, partners, and society at large”.
Marketing is also a set of processes because there are essential tasks that have to be engaged in order to
produce a viable marketing strategy. Finally, a key takeaway that we can infer from the above definition is that there is
a give-and-take relationship that lies at the heart of marketing. Marketers seek to provide valuable products and
services to customers. In return, they also need to benefit from it. Of course, this generally happens through the revenues
that companies receive from customers (in the case of profit-oriented enterprises). But there are other ways through
which a marketing exchange leads to mutually beneficial transactions:
Politicians offer promises and hope to potential voters in exchange for their votes that bring them to office.
TV stations broadcast soap operas to homes in exchange for viewers (hopefully) watching the ads that in turn
would provide profit for the stations.
Facebook offers its services to its millions of users for free in return for the users allowing paid ads to
occasionally show up in their feeds.
These are all examples of exchange transactions that seek to benefit the parties involved. Some transactions
can be complex (as in the case of TV stations and its tertiary dealings with outside advertisers), but the typical
transaction that we are most familiar with is the common everyday pay-for-product merchant transaction.
Every time you go to a convenience store to buy a snack, it is actually the end result of a marketing process. It
begins with the snack manufacturer doing research in order to identify what snacks are already in the market, what
customers are looking for, and spotting potential market gaps that can still be filled. Next, the manufacturer profiles the
intended market, understanding their demographics, economic class, lifestyle, and a whole slew of other data. The
On a broader scale, marketing is all about changing behavior through communications in order to achieve
objectives. Getting consumers to buy your products may be the most obvious manifestation of a change in behavior, but
it is not the only possible marketing objective. Marketing can also be about changing customer attitudes and perceptions
about your product, such as getting the customers to actually like it in order to get them to eventually buy it. It could be
as simple as making the market realize that your product actually exists - again, in order to get them to eventually buy
it.
If there is a way to describe what marketing is all about in a very concise manner, then it can be this: Marketing
is about meeting needs profitably (Kotler and Keller 2006). You go into business so that you get to satisfy the needs of
the market and, in doing so, you also get to satisfy your organization’s own needs.
Goals of Marketing
Marketing goals are not just far-fetched desires; they are vital markers to success. You need a way to gauge
your marketing efforts. Otherwise, how will you know if what you’re doing is working, or if it’s simply luck? Marketing
goals enable you to stay on track with the objectives for your small business. Setting quantifiable goals allows you to
properly allocate time and money to marketing strategies that work, and to do away with those that don’t. Some
quantifiable marketing goal examples are follower counts, ROI, weekly or monthly sales, site visits, and other
“countable” items.
Traditional marketing is an umbrella term that covers the wide array of advertising channels we see daily.
These may include print media, billboard and TV advertising, flyer and poster campaigns and radio broadcast
advertising.
Traditional marketing theories include Ansoff’s Matrix, a theory that proposes products/services fall into one
of four categories depending on the market and the product released. New Product – New Market is considered as
diversification. This theory recommends that businesses should try to diversify their product portfolio so as to spread
risk amongst their product range. An example of this would be when apple created the first iPhone released in 2007.
This product was new and introduced into a new market. Apple soon reaped the benefits of introducing this hugely
popular phone. Their product range grew from accommodating for designers on the Apple Mac, to mobile devices, tablet
devices, watches and beyond.
Another marketing theory that’s considered to be traditional is the marketing mix. Made up of the 7 P’s. These
include product, place, promotion, price, packaging and positioning. All these components, when combined, create a
solid marketing proposal.
Contemporary marketing refers to theories that stress the importance of customer orientation versus the
traditional market orientation. They are strategies that, when implemented, offer greater support for their client base
with a product range that varies depending on what the target market desires. Rather than what the company wants
then to have.
Contemporary marketing theories include Co-Creation. This theory suggests creating a bridge between the
customer and business through gamification. A practical example would be attracting customers through social media
content relevant to their needs or writing article blog posts that have useful information.
Another popular contemporary marketing theory is shared value. This theory considers that market that the
company is wanting to penetrate and seeks to offer perks in said market. A successful example of this would include
Tesla. They have invested millions of dollars building charging stations for electric cars across North America, Europe,
and Asia. For B2B companies, this may include creating events where companies in the same industry can be invited
and discuss amongst themselves offers they can give each other.
Self-Check 1.1
How well did you understand what you have read? Answer the following
questions briefly. (1 whole sheet of paper – intermediate/ yellow paper).
(One paragraph only with at least 5 sentences). 10pts each
1. If ABS-CBN did not have the rich financial backing that allowed it to
pirate stars and produce quality programming, do you think it
could still have become successful?
2. Same situation in no. 1, what would have been your alternate
strategy?
ABS-CBN is a dominant player among the Philippine television networks today. But it was not always this way.
In fact, once upon a time, it started life as the least watched television network in the country!
This is a brief account on how the least-popular television network transformed into a media powerhouse and
how they used marketing strategy to get there.
In 1986, after the People Power revolution, ABS-CBN was practically a reborn TV network having finally been
freed from nearly 14 years of government control under Martial Law. Immediately, they put together a pool of local and
international television shows and began broadcasting.
But by the end of 1986, ABS-CBN was the last placer among the five TV networks back then. It was a severe
blow to the company’s pride and they vowed to turn the tables from then on. In fact, they wanted nothing less than to
be the number one network in the country.
To better understand their circumstances back in 1986, it would help to understand the environment then. For
one thing, cable TV was nearly unheard of. It would be years before the advent of VCDs, much less DVD players. There
were no mobile phones and home computers were a rarity. Everybody went to the movies if they wanted a treat (and
air conditioning). Home video was a luxury that was only available to the upper-income earners (via videotape players).
For much of the country, home entertainment options were limited to TV, radio, and reading materials.
GMA-7. This television network was the acknowledged darling of the upper and middle class. It
provided them with quality TV shows especially top-rated programs from Hollywood. By all intents
and purposes, GMA-7 was the market leader for the middle and upper middle classes.
RPN-Q. This television was the runner-up for the middle-class viewership. They also provided local
and international programming that was similar to that of GMA-7.
PTV-4. The government network. People joke that nobody watches its public service programming
and that it only gains viewers whenever there is a basketball game or a boxing match. It is because they
have broadcast rights to the games of the Philippine Basketball Association and regularly bid for the
rights to broadcast popular boxing matches.
IBC-13. The undisputed market leader. While GMA-7 dominated the upper-class
viewership, IBC-13 dominated the mass market. It was the popular channel among
the so-called “masa” thanks to its predominantly local TV shows that featured the
most popular actors and actresses.
1. Nationwide reach
2. Huge financial resources, courtesy of its parent company
The basic framework for any marketing strategy is summarized by the mnemonic of STP: Segment, Target, and
Position. First, identify the available market segments. Next, select or target the most promising market segment among
the available options. Finally, position your product to that best suit the needs of the targeted market.
Because ABS-CBN wanted nothing less than market leadership, they really had only two possible courses of
action: compete directly with GMA-7 for the higher income class segments or compete directly with IBC-13 for the broad
market. This as the segmentation phase.
A quick scan of the strengths arid weaknesses of these two competitors revealed that:
GMA-7 was well managed and cash-rich, which means that any attempt to compete with them would
be a long and arduous battle.
On the other hand, while IBC-13 was very popular with the viewing public, things were not so good
behind the scenes: artists were unhappy because they were not being paid enough or even on time, a
lot of complaints versus the management and the production quality, so the shows were pathetic.
Therefore, in terms of which network to target, it became clear that ABS-CBN would have a better chance if it
competed directly with IBC-13. This was the targeting phase.
Finally, with a clear market segment to target, ABS-CBN addressed the key question: What does the broad
market, the “masa,” want?
The answer came through market research which quickly revealed a key insight: the broad market watched
IBC-13 simply because their favorite stars: were all there. In fact, this market did not even care whether or not the TV
shows were good or not, so long as their favorite stars were there. It was a star-oriented behavior. This led to the final
peg in the marketing cycle, the position. ABS-CBN realized that they had to position themselves as the network of stars.
Now that the core marketing strategy was in place, it was time to plan the details and the tactics that would
flesh it all out.
By matching their strengths with the opportunities that the competitor scan revealed, ABS-CBN soon came up
with a strategy for competing against IBC-13:
Use its key strength, namely its huge financial resources, to lure the unhappy stars of IBC-13 toward its
own camp with very attractive compensation packages.
Use its financial resources to build better quality programming.
Relaunch itself as “The Star Network,” the network that you go to in order to see your favorite stars.
As the revamped channel rebuilt itself, it also took advantage of an opportunity that it had: the ability to ride
on the success of its sister radio station, DZMM, which was a popular medium for getting news. By turning its popular
radio newscasters into TV news personalities, they transformed TV news - which used to be a stodgy and droll affair
among all the TV channels - into a popular infotainment medium. Viewers finally got to see what their favorite radio
newscasters actually looked like. These newscasters too became TV stars in their own right.
In 1986, ABS-CBN finished the year in last place. By 1987, they became the number two network in the country
and by 1988, they became the number one TV network. From last place to number one in just two short years. This was
a truly amazing turnaround and it was made possible through the shrewd use of the principles of marketing.
The insight that the company came up with: instead of trying to compete head-on versus Coke, why not build
up a different beverage category altogether? Essentially, they would compete with Coke by not competing directly with
it. They quickly spotted an opportunity in the form of bottled tea drinks, which were gaining popularity in China at the
time. While there were already ready-to-drink tea products in the Philippine market, these were either in the form of
powdered beverages or expensive bottled teas.
In its first month, URC quickly sold a hundred thousand bottles of C2. It rapidly built up a loyal following,
especially among a surprisingly large market segment: people who have stopped drinking cola beverages for health
reasons. What is more, cola drinkers who discovered the health premise of C2 became eager to let go of their cola habits,
especially upon realizing that C2 also happened to be cheaper as well.
C2 rapidly became a success, often being sold out in stores and much of this success could be attributed to its
key strategy points which could be summarized as follows:
deciding not to compete directly with Coke, and instead make competition irrelevant by producing a
totally different beverage concept;
targeting a market that. was already weary of cola beverages, a market that turned out to be huge;
building the product’s position around the message of better health; and
offering a product that happened to be cheaper than cola drinks, without necessarily communicating
that it was “cheap”.
C2’s success was eventually responsible for giving Coke its first real challenge in the country for years. In fact,
the impact of C2 on cola sales was so significant that it led Coca-Cola to aggressively push a new product into the market.
Coke Zero which was positioned to be a health-oriented beverage. By then, however, C2 had already built up the new
product category of ready-to-drink green tea beverages and dominated it with a 75 percent market share.
Self-Check 1.2
How well did you understand what you have read? Answer the following
questions briefly. (1 whole sheet of paper – intermediate/ yellow paper).
(One paragraph only with at least 5 sentences). 10pts each
1. What kind of communication does a marketing entity generate? For instance, imagine
a Starbucks coffee shop. What are the detailed elements that communicate messages
to the buyer and what are those messages? (2 paragraphs only with at least 5 sentences
each paragraph). 20pts
2. Consumers do not directly pay free TV stations, such as ABS-CBN or GMA TV, in
exchange for viewing their programs. Map out the model on how the marketing
system works for this industry. 30pts
Points to Remember
There are many basic principles of marketing, but five of the most important are
understanding the problems of your consumer, learning about your ideal market,
demonstrating the value of your product or service, generating leads and building
relationships.
Traditional marketing is concerned with pulling customers and does not really consider
the customer’s diverse needs. Rather it is concerned with the market or industry in which
company operates in.
Contemporary marketing aims for customers’ satisfaction in order to build a relationship
with them.
References
Ilano, A.B. 2016. Principles of Marketing, 2016 Edition. Published, copyrighted 2016, and distributed by Rex
Book Store, Inc (RBSI) with main office at 856 Nicanor Reyes Sr. St., Sampaloc, Manila. Pages 2-9; 29-37.
NERISSA S. DELOS REYES, MAEd, SMRIEdr DR. RAMON E. WOO, JR., CPA, DFRIEdr
VP/ Basic Education Principal Dean of Studies
Noted by: