Quarter 3 Week 4-7

Objectives

1. Differentiate between strategic marketing and tactical marketing; and

2. Discuss how strategic marketing and tactical marketing are implemented.

What is STRATEGIC AND TACTICAL MARKETING

STRATEGIC MARKETING

Is defined as the general plan of action aligned with the vision and goals of the company.

This is a carefully though- out course of action developed to achieve desired result such as profitability and high productivity. 

It puts a heavier emphasis on external environmental scanning to develop strategies to respond to the environmental forces that confront the company.

It is the thinking process that outlines the course of action towards the achievement of a goal. It is usually three to five years.

TACTICAL MARKETING

Refers to the actions a company undertakes to execute an organization’s strategy. 

Also refers to a detailed action program covering a shorter period.

In writing the marketing plan, one should indicate the marketing tactics needed to achieve the marketing strategy. These tactics must cover the factors that address consumer needs and wants such as product, price, promotion, place, people, process, and physical evidence.

STEPS IN DESCRIBING MARKETING TACTICS IN THE MARKETING PLAN:

1. Prepare an action plan

List down the steps in delivering each tactic and note important details such as time frame, suppliers, requirements, issues, and persons in charge.

2. Name the necessary resources and monitor the allocated budget

• Get quotations for all the elements of the proposed tactics and make a detailed budget plan

• Make sure that the budget can support the tactics

• Assign person to monitor the budget throughout the marketing campaign.

3. Identify how the success of the tactics will be measured

Outline how to evaluate the effectiveness of the tactics by setting goals and benchmarks.

Example: joining bazaars for start ups. 

THE MARKETING ENVIRONMENT

Objectives

1. Identify and discuss the aspects of the marketing environment;

2. Describe the microenvironment and its internal factors; and

3. Describe the macroenvironment and its external factors.

MARKETING ENVIRONMENT Is the sum of all the internal and external forces that affect the way a firm operates, particularly its ability to build and maintain relationships with its target customers

The internal forces are referred to as the microenvironment

 The external forces are called the macroenvironment

MICROENVIRONMENT

The microenvironment consists of all the internal factors which have direct contact with and direct influence on the company. Below are the five components:

1. Organization

Consist of the owners, investors, and employees who are all considered members of the organization. The top management must develop the mission, vision, goals, and policies which set the stage for the marketing plans. Top management provides direction and lays out the strategies and plans.

An organization is composed of different departments with specialized functions, and these should all work together to achieve the company’s objectives. Marketing managers work hand in hand with these departments to ensure superior value to customers.

2. Suppliers

Provide the resources the organization needs to produce goods and services. A good relationship with suppliers enables the organization to ensure the availability of supplies for prompt operations. 

3. Customers 

Are the people who are willing and can buy the products and services of the organization. 

Considered as the lifeblood of the business

4. Marketing intermediaries 

Are entities that assists in the distribution and selling of goods to customers. They help in the free flow of goods from organizations to the different markets.

 four types are wholesalers, retailers, distributors, and agents and brokers.

Wholesalers- buy goods from manufactures or producers and resell them to retailers and other organizations

Distributors- are selected by manufacturers to buy goods for resale to retailers

Retailers- carry a wide range of goods that were bought from wholesalers or distributors and then sold directly to consumers. They have different brands of goods manufactured or produced by competing organizations.

Agents and brokers- sell products for a certain commission or percentage of sales

5. Competitors

Are rival firms that offer similar goods or services as the organization

Direct competitors are brands competing in the same industry, offering essentially the same goods or services

Indirect competitors offer products or services that differ slightly, but with the same benefits.

MACROENVIRONMENT

The macroenvironment consists of various factors that affect not only the firm itself but also the entire industry of the region or country. These factors are broader than those of the microenvironment and out of the firm’s control. Below are the 6 types:

1. Demographics

Refer to the characteristics of a population such as age, gender, religion, educational attainment, status, geographic location, lifestyle, race, and others.

2. Economics

Refer to the influence of the purchasing power of the peso on spending patterns, in the context of inflation, and other economic forces that affect the economy.

3. Sociocultural factors

Refer to the beliefs, practices, norms, customs, and traditions that may affect business operations culture and have a big impact on how goods and services may be marketed

Successful brand companies in the Philippines use traditional Filipino values such as hospitality, generosity, and religion

4. Technological factors

Refer to developments in technology that may affect consumers, businesses, and society at large.

5. Political forces

Refer to groups of people or parties which may influence the stability of a country which could further affect the production, distribution, promotion, and selling of goods and services.

Legal forces refer to limitations and restrictions that arise from the implementation of laws which may affect the conduct of business activities.

6. Ecological Factors

Refer to the processes or activities necessary to protect the natural environment while maintaining the efficiency of business operations

MARKETING RESEARCH

Objectives

1. Define marketing research;

2. Discuss the importance of marketing research to a business enterprise; and

3. Identify the steps in marketing research.

MARKETING RESEARCH Is the process of collecting and analyzing data to address a specific marketing problem.

It can be concerned with the different aspects of the market including product, sales, buyer behavior, promotion, distribution, pricing, and packaging.

Many companies have used marketing research to decide whether to launch a product, introduce a variant of the product, reinvent the branding, and so on. 

The role of marketing research is not to make marketing decisions but rather to help reduce risks in decision – making.

IMPORTANCE OF MARKETING RESEARCH

Contribute to the success of different marketing activities

Example: conducting marketing research before introducing a product to the market can help identify the demographics of the target market, determine the probability of success, and point out alternative courses of actions

Help update marketers about the activities and strategies of competitors through comparative studies

Determine aspects of the business that need to be changed or upgraded

Help identify opportunities and new areas for expansion

THE  MARKETING RESEARCH PROCESS

1. State the objectives.

• the marketing researcher must first establish the objectives of the research. These objectives will be the bases for research questions. 

• should be clear concise, attainable, measurable, and quantifiable.

• defining the objectives aids the researcher in designing a market research process that suits the capacity and needs of the company.

• helps avoid setting conflicting expectations and gathering irrelevant data.

2. Determine the research methodology

The research methodology may be adapted to the manner of gathering information:

primary research - gathers original information directly through surveys, experiments, field tests, direct observations, focus group discussions, and interviews.

secondary research - uses previously published information such as materials on the internet, existing marketing research results, data from the company’s stock list and customer databases, and information from external organizations.

the methodology may be based on the type of information to be gathered:

Quantitative research involves numerical data such as customer return frequency, sales figures, and financial trends.

Qualitative research mainly studies views and attitudes about the company’s products and services.

the research methodology may also depend on the type of study:

exploratory research involves reaching a better understanding of the research problem and identifying the variables to be measured. this can be done through trial studies, interviews, group discussions, and experiments.

descriptive research describes marketing or marketing mix characteristics and the extent of association between variables. before conducting this type of research, the researcher must already have a good understanding of the research problem through a prior exploratory study.

Causal research investigates cause-and-effect relationships or why a change in one variable brings about a change in another.

3.Gather data

The research should collect data based on his or her chosen research method. the researcher should ensure that the gathered information is detailed and complete to avoid misleading or irrelevant results.

Companies can also gather data through their marketing activities (e.g., online surveys are included in company websites to get useful customer feedback.

4.Interpret the results

After collecting the data, the researcher should now be ready to interpret them. To select appropriate statistical tools for quantitative data, the researcher must first figure out how many samples are to be compared, whether these samples are related or unrelated to one another, and the levels of data measurement (e.g. frequency of items, ranking of items.) 

For qualitative data, the researcher can use tables, flow charts, or perceptual maps to group similar information, identify trends and themes, and take note of major points that are uncovered.

5.Present the results

Interpreted data can be presented in a textual report with graphs, charts, tables, and figures. There should be a comprehensive documentation of the entire research process so it can be a helpful reference for the firm’s future decision-making needs of the firm.

CONSUMER MARKET

Objectives

1. Define consumer market;

2. Discuss consumer purchase decision process and the factors that influence consumer behavior; and

3. Enumerate and discuss the types of consumer buying behavior.

CONSUMER MARKET Is a system composed of all individuals or consumers who purchase goods and services for personal consumption or use. Consumers make a lot of purchasing decisions everyday as they choose to avail of certain products and services. 

CONSUMER MARKET PROCESS

1. Recognizing a need.

The consumer thinks of brands and products that he or she would purchase to satisfy his or her need or want 

2. Searching for information about a product 

The consumer, then searches for information about the product or service that he or she considers purchasing. This information comes from various sources such as advertisements, which turn may utilize 

3. Evaluating the different products

After gathering information about the products, consumers may again review their options and evaluate them for their strong points before making their final choice 

4. Making a final purchase decision

In the actual purchase decision, consumers will avail of their preferred services or products. The final choice of the consumer is based on his evaluation of the products or services beforehand.

5. Making an after-purchase evaluation 

After the purchase, the consumer will evaluate the product or service. If the consumer is satisfied with the product or service, there is a possibility of a repeat purchase. If there is dissatisfaction, the marketers must identify what feature of the product has fallen short of the consumer’s expectation 

FACTORS INFLUENCING CONSUMER BEHAVIOR

1. Cultural factors- refer to the beliefs, traditions , mores, norms , and values learned by an individual from his or her family and other  institutions in society.

2. Social factors- refer to the sum of the customer’s social functions and interactions with the members of his group.

3. Personal factors are exclusive to the individual alone, such as age, lifestyle, occupation, civil status, religion, economic status, and personality.

4. Psychological factors are associated with human mind and behavior. (motivation, perception, learning, and beliefs and attitudes) 

Psychological factors:

Motivation is the reason that guides one's behavior. For example, a person might go to a fast-food chain or restaurant since he is motivated by a desire to satisfy his or her hunger.

Perception is the individual's unique way of viewing an object or phenomenon. In terms of consumer behavior, people may have different perceptions about certain brands. Some consumers prefer buying Pepsi products than Coke products. One reason for this is that consumers may have a positive perception of Pepsi products compared to Coke products. This may have been influenced by the advertisements of both brands.

Learning is defined as the change in the behavior of the individual after acquiring knowledge or experience. In marketing, this translates as the change in the consumer's behavior and perception of the product or service after availing of it. For instance, if a customer is satisfied with the services of a particular hair salon, he or she develops a positive perception towards it. The customer, then, considers making a repeat visit to the salon. On the other hand, if the customer is dissatisfied with the services in the salon, he or she may consider visiting other salons in the future.

Finally, beliefs and attitudes are centered on the assumptions that the consumer has about a product or service. For example, a customer may believe that Tide is the most effective brand in removing stains from clothes. The consumer, then, will develop a favorable attitude over the product. Subsequently, it will drive the consumer to buy the product, and purchasing it will become a habit. When the individual has become a habitual consumer, there is no longer a need to persuade him or her to purchase the product. The consumer takes the initiative in doing so because of his or her positive belief and attitude regarding the brand.

Among these psychological factors, perception is the most neglected aspect of marketing.

Some products were introduced but discontinued because of poor sales due to miscalculations and poor perception.

One example is Pepsi A.M., launched in 1989. It was marketed as a morning drink similar to coffee. However, consumers did not perceive Pepsi as a morning drink. For them, Pepsi is still a soda, not coffee. Because of the wrong perception, Pepsi A.M. was pulled out a year later.

Another example is Burger King's Satisfries, launched in 2013 as an alternative to their traditional french fries. The Satisties had less fat and calories and was marketed as a healthier menu fem. However, consumers perceived that it was not as good as the original

Types of consumer buying behavior:

The buying behavior of an individual is mostly determined by the level of his or her involvement in purchasing a product or service. 

Involvement relates to the willingness of the consumer to acquire more information about the product or service before purchasing it  and determining the differences between brands of the same product before making a final purchase.

1. Variety -seeking behavior

  Requires very little to no amount of involvement. Usually, a consumer manifests this type of behavior for the sake of trying something new or when purchasing products that are cheap but not routinely used

2. Habitual buying behavior

Requires a minimal amount of involvement.  A consumer manifests this type of behavior when purchasing products that are routinely used but with features that do not significantly differ from other brands.

3. Dissonance- reducing behavior

Often requires a relatively larger amount of involvement. A consumer manifests this type of behavior after buying a certain product brand and realizes that he or she made the wrong decision.

4. Complex buying behavior 

- Requires the greatest amount of involvement. A consumer manifests this type of behavior when buying a very expensive product, such as a piece of furniture or a luxury car. 

BUSINESS MARKET

Objectives

1. Define business market and its characteristics;

2. Discuss the business buying decision process and its various aspects.

BUSINESS MARKETS Are composed of firms and business organizations that purchase semi processed goods and raw materials either for their operations or for reselling.

Decision- making in business markets involves large groups of people since purchases tend to be expensive or large in quantity.

The purchase decision of a company is often entrusted to a group of employees or members of management

They evaluate the products and the suppliers to ensure that the goods and materials are of the highest quality. Oftentimes, the buyers base their purchase on certain product specifications.

CHARACTERISTICS OF BUSINESS MARKETS

1, The demand in business markets

The demand for products in the business market is referred to as derived demand. It is based on the needs of consumers

Example: If people start buying more bread, bakeries will need more flour. As a result, flour suppliers experience an increase in demand.

2. The complexity of buying decisions

Businesses spend large amounts of money on products, especially for long-term or bulk purchases like machinery. Decisions are carefully planned, often involving contracts and formal agreements.

Example: A construction company buying an expensive bulldozer will check every detail of the purchase, including warranties and maintenance costs, before signing a formal contract.

2. The involvement of professional purchasing agents

Companies hire experts who specialize in buying to ensure they get the best quality and price. These agents handle negotiations and purchasing decisions.

Example: A restaurant chain may have a purchasing manager responsible for sourcing fresh ingredients from suppliers at the best rates.

BUSINESS BUYING DECISION PROCESS

1. Recognition of a Need

Businesses identify a need for materials, equipment, or upgrades to improve products or services.

Example: A coffee shop notices customer demand for cold drinks and decides to purchase a machine to make iced coffee

2. Determining Product Specifications

• Businesses determine the features or requirements of the product they need, often with the help of experts.

Example: The coffee shop decides the machine must produce 50 iced coffees per hour, fit on the counter, and be easy to clean.

3. Listing Possible Suppliers

• Companies search for suppliers who can meet the product specifications at a reasonable price.

Example: The coffee shop looks at different companies that sell coffee machines, checking their prices, reviews, and warranties.

4. Selection of Supplier

• Businesses choose a supplier that offers the best product based on quality and cost. The purchase is made, and the supplier becomes the business’s official partner.

Example: The coffee shop selects a supplier that offers the machine with a discount and free installation.

5. Periodic Review

• After purchasing, the product is regularly checked for performance and quality.

Example: The coffee shop’s staff monitors how the machine performs and evaluates if it meets the demand for iced coffee.

TYPE OF BUSINESS BUYING SITUATIONS

BUYING SITUATION – involves the nature and frequency of a purchase

1. Straight rebuy – the company or firm is satisfied with the raw materials or equipment from the supplier and makes rebuys regularly 

2. Modified rebuy happens when the company or firm has encountered problems in the supplier’s raw material or equipment of the supplies. (pricing, terms of payment, delivery schedule)

3. New buy- refers to a new purchase made by the firm or company from a different supplier.

PARTICIPANTS IN THE BUSINESS BUYING PROCESS

1. Users- directly utilize products and services from suppliers

Example: The employees in a factory who operate new machines purchased by the company.

2. Influencers help in further defining the specifications and features needed for a product or service

Example: Engineers in a company suggest what type of machine is needed for better production.

3. Buyers are usually the professional purchasing agents of the firms who negotiate with the suppliers as part of the buying process

Example: A company’s purchasing manager negotiates a contract with a supplier for bulk raw materials.

4. Deciders are people in the business organizations who have the authority to make or approve decisions

Example: A company’s CEO approves the purchase of a new delivery truck.

5. Gatekeepers control the flow of information from the business markets to the suppliers.

Example: The administrative assistant filters supplier emails and only forwards relevant ones to the purchasing manager.