Module 1 It is a system concerned with the planning and development of products and services, determination of prices, creation of promotional programs and distribution system to present and prospective market for the satisfaction of their existing needs and wants, thus maximizing profit in the longrun. Marketing is a system Product or service planning and development, pricing, promotion and place of distribution Presence of current and potential market Satisfaction of existing needs and wants. Marketing organizations or marketers Things to be Marketed Target market or the buyers Producers Manufacturers Wholesalers Retailers Institutions who buy raw materials and process these into final products Institutions buying intermediate or half-finished materials and process these into final products Institutions who buy finalfinished products and resell them in bulk in the same original form. Institutions who buy finished products and re-sell in small quantities, the same goods to final users. PRODUCTS SERVICES IDEAS INSTITUTIONS OR PEOPLE Consumer Market- those who buy goods for their own personal use or purpose Industrial Market- those institutions or people who buy industrial goods either for the purpose of using in business or for re-sell purpose Target Market Marketing System Things to be marketed Marketing Organizations OPERATIONAL DIMENSIONS OF MARKETING Is a management orientation which holds that the key task of the organization is to determine the needs and wants of the target markets and to adapt the organization to delivering the desired satisfactions more effectively and efficiently than its competitors. MARKETING CONCEPT Is a management orientation which assumes that consumers will either buy or not buy enough of the organization’s products unless the organization makes a substantial effort to stimulate their interest in its products. SELLING CONCEPT Discovers market needs (Research) Product Planning and Development (Production) Distribution of Products and Services GUARANTEED SALES VOLUME AND PROFITS AT CUSTOMER SATISFACTION Product Planning and Development Promotional Methods and Selling Distribution of Products and Services UNGUARANTEED SALES VOLUME AND PROFIT, UNGUARANTEED CUSTOMER SATISFACTION Goods and Services Gathering of Information Marketing Organizations Target Market Information Payments It is the process of knowing the overview of the entire target market, but differentiating them from competitors by recognition of sub-markets with similarity in needs but differs in demographic, geographic, economic, cultural and psychological ways. Consumer/Industrial Market Demographic bases- population, age group, Cultural bases- race, religion, nationality, sex category education, occupation Economic bases- income bracket Psychographic bases- personality, buying attitudes, product benefits desire Consumer Goods a. Convenience goods b. Shopping goods c. Specialty goods Industrial Goods a. Raw materials b. Fabricating materials and parts c. Installations d. Accessory equipment e. Operating supplies Consumers know what, how, when and where to buy these products because they have complete product knowledge. Consumers do not exert too much effort in buying (accessible outlets) If temporary or permanent product inavailability exists, consumers are willing to accept substitute brands Examples: toothpaste, candies, seasonings They may be sub-classified into service goods or fashion goods. They compare product prices or other features before deciding for the best buy. Market may not have full knowledge so they product information is obtained as they shop around. Examples: RTW, shoes, appliances, furnitures Consumers are willing to exert special buying effort and may spend time to reach exclusive dealers Consumers are after the brand prestige, irrespective of its high price. In some cases, consumers may not accept substitute brands. Examples: Signature items like Sylvia Santos bags Products which will become part of another final product Products when integrated to produce another product can be unidentifiable or cannot be physically separated. Examples: flour in making bread, eggs for processing milk These are industrial goods which will become part of another final product but are identifiable in finished form. These are assembled products with no further change in form. Examples: buttons in dresses, sparkplugs and fan belts These are major equipments of the industrial user. They affect operating scale for production quota of the company.’ Examples: adding dozen of typewriters in a business; adding three presser machines for a tin can industry. They facilitate or aid in the production operation of the industrial user. It will not be part of any final product nor give significant effort in production scale. Examples: cash registers for food chain outlets, calculators These are the convenience goods of industrial market They have low unit price, short-lived which facilitate business operations. Examples: pens, pencils, typewriting papers Marketing a Potentially Harmful Product The Swiss pharmaceutical global corporation Hoffman-LaRoche has made a major breakthrough in the relief of serious disabling disease that affects 3 percent of the world’s population. Their new product, Tigason, is the first product that effectively controls severe cases of psoriasis and dyskeratoses, skin disorders that cause severe flaking of the skin. Sufferers from this disease frequently retreat from the society because of fear of rejection; thus losing their families and jobs. Tigason does not cure the disease but it causes the symptoms to disappear. There is one potential problem. Because of the risk of damage to unborn babies, women should not take the drug for one year before conception or during pregnancy. Hoffman-La-Roche is well aware of the potential for harm to the company if the product is misused. The marketing department is asked to formulate a strategy for disseminating product information and controlling Tigason’s use. As marketing manager, what do you recommend?