SAMAL ISLAND CITY COLLEGE

Datu Taganiog, Brgy Penaplata, Samal Distirct

Island Gardedn City of College
Davao Del Norte, Philippines

BUSINESS
MARKETING

Image taken from: DisruptiveMarketing

Course Content: The course deals with the principles and practices in marketing
goods and services. It also focuses on the development of integrated marketing
programs that will help grow business.

Prepared by:

Kate Nalla D. Ferolin, CHIA

BSTM- Faculty
Chapter 1: MARKETING PRINCIPLES
AND STRATEGIES

Photo source: TechFunnel

Objective
At the end of this chapter, the students will be able to:

• define and understand marketing;

• describe the traditional approaches to marketing;
• discuss the goals of marketing; and
• identify and explain contemporary marketing approaches

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I. INTRODUCTION
This chapter introduces you to the basic
concept of marketing. Simply put, marketing is
managing profitable customer relationships. The aim of
marketing is to create value for customers and capture
value from customers in return. Next, traditional
approaches and goals of marketing for the firm are
likewise discussed in this chapter. Finally, this chapter
also identifies and explains the different contemporary
marketing approaches. Image taken from: BlinkSigns

Today’s successful companies have one thing in common. They are strongly customer
focused and heavily committed to marketing. These companies share a passion for
understanding and satisfying customer needs in well-defined target markets. They motivate
everyone in the organization to help build lasting customer relationship based on creating
value.

II. PRESENTATION AND DISCUSSION

What is Marketing?
Marketing, more than any other business function, deals with customers. Although we will
soon explore more-detailed definitions of marketing, perhaps the simplest definition is this one:
Marketing is managing profitable customer relationships. The two-fold goal of marketing is to
attract new customers by promising superior value and keep and grow current customers by
delivering satisfaction.

Example No.1:

Walmart has become the world’s largest retailer –

and the world’s largest company – by delivering on its
promise, ‘’Save money, Live better.’’ Example No. 2:

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 Nintendo surged ahead in the video games market behind
the pledge that ‘’Wii would like to play’’, backed by each
wildly popular Wii console and a growing list of popular
games and accessories for all ages.
Image taken from: Amazon.com

Example No.3

McDonald’s fulfills its ‘’I’m lovin it’’ motto by being ‘’our

customer’ favorite place and way to eat’’ the world
over, giving it a market share greater than that of its
nearest three competitors combined.
Image taken from: Youtube.com

Sound marketing is critical to the success of every organization. You already know a lot about
marketing – it’s all around you. Marketing comes to you in the good old traditional forms. You
see it in the abundance of products at your nearby shopping mall and the adds that fill your
TV screen or even mobile phones!

They reach you directly and personally. Today’s marketers want to become part of your life and
enrich your experiences with their brands – to help you live their brands.
At home, at school, where your work, and where you play, you see marketing in almost
everything you do. Yet, there is much more to marketing than meets consumer’s casual eye.
Behind it all is a massive network of people and activities competing for your attention and
purchases.

Keep reading! and you will learn more about the concept of marketing.

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Marketing Defined
What is marketing again? Many people think of marketing
as only selling and advertising, that’s what you also
thought right? We are bombarded everyday with TV
commercials, catalogs, sales calls, and e-mail pitches.
However, selling and advertising are only the tip of the
marketing iceberg.
Image taken from: Istock.com

Today’s marketing
must be understood not in the
old sense of making a sale – ‘’telling and selling’’ – but in the new sense of satisfying customer
needs. If the marketer understand consumer needs, develops products that provide superior
customer value and prices, distributes, and promotes them effectively, these products will sell
easily. In fact, according to management guru Peter Drucker, ‘’The aim of marketing are only part
of a larger’’ ‘’MARKETING MIX’’ – a set of marketing tools that work together to satisfy customer
needs and build customer relationships.

Marketing Mix – 4 Ps & 4 Cs

Broadly defined, marketing is a social and managerial process by which individuals

and organizations obtain what they need and want through creating and exchanging value
with others. In a narrower business context, marketing involves building profitable, value laden
exchange relationship with customers. Hence, we define marketing as the process by which
companies create value for customers and build strong customer relationships in order to
capture value from customers in return.

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The Marketing Process
The figure below presents a simple, five-step model for the marketing process. In the first four
steps, companies work to understand consumers, create customer value, and build strong
customer relationships. In the final step, companies reap the rewards of creating superior
customer value. By creating value for consumers, they in tun capture value from consumers
in the form of sales, profits, and long-term customer equity.
A Simple Model of the Marketing Process

UNDERSTANDING THE MARKETPLACE AND CUSTOMER NEEDS

As first step, marketers need to understand customer needs and wants and the market place
in which they operate. We examine five core customer and marketplace concepts:
1. Customer needs, wants, and demands
2. Market offerings – products, services, and experiences
3. Customer Value and Satisfaction
4. Exchange and relationships
5. Markets

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1. Customer Needs, Wants, and Demands

The most basic concept underlying marketing is that of

human needs. Human needs are states of felt
deprivation. They include basic physical needs for food,
clothing, warmth, and safety; social needs for belonging
and affection; and individual needs for knowledge and
self expression. Marketers did not create these needs;
they are basic part of the human makeup.
Image taken from: iConfinder.com

Wants are the form human needs take as they are

shaped by culture and individual personality. Filipino
needs food but wants a Big Mac, french fries and soft
drink. Wants are shaped by one’s society and are
described in terms of objects that will satisfy those needs. When backed by buying power,
wants become demands. Given their wants and resources, people demand products with
benefits that add up to the most value and satisfaction.

2. Market Offerings – Products, Services, and Experiences

Consumers’ needs and wants are fulfilled through

market offerings – some combination of products,
services, information, or offerings are not limited to
physical products. They also include services – activities
or benefits offered for sale that are essentially intangible
and do not result in the ownership of anything.
Image taken from: SiriusDecisions.com

Examples include banking, airline, hotel, tax preparation, and home repair services.

More broadly, market offerings also include other entities, such as persons, places,
organizations, informations, and ideas.
Many sellers make the mistake of paying more attention to the specific products that they
offer than to the benefits and experiences produced by these products. These sellers suffer
from marketing myopia. They are so taken with their products that they focus only in existing
wants and lose sight of underlying customer needs. They forget that a product is only a tool
to solve a consumer problem.

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3. Customer Value and Satisfaction

Consumers usually face a broad array of

products and services that might satisfy a given
need. How do they choose among these many
market offerings? Customer form expectations
about the value and satisfaction that various
market offerings will deliver and buy accordingly.
Satisfied customers buy again and tell others
about their good experiences. Dissatisfied customers often switch competitors and disparage the
product to others.
Marketers must be careful to set the right level of expectations. If they set expectations too
low, they may satisfy those who buy but fail to attract enough buyers. If they expectations too
high, buyers will be disappointed. Customer value and customer satisfaction are key building
blocks for developing and managing customer relationship.

4. Exchanges and Relationship

Marketing occurs when people decide to satisfy needs

and wants through exchange relationship. Exchange is
the act of obtaining a desired object from someone by
offering something in return. In the broadest sense, the
marketer tries to bring about a response to some market
offering. The response may be more than simply buying
or trading products and
service. A political candidate, for instance, wants votes, an orchestra wants an audience, and
social group wants idea acceptance.
Marketing consist of actions taken to build and maintain desirable exchange relationship with
the target audiences involving a product, service, idea, or object.

5. Markets
The concepts of exchange and relationships lead to the concept of a market. A market is the
set of actual and potential buyers of a product or service. These buyers share a particular
need or want that can be satisfied through exchange relationships.
Marketing means managing markets to bring about profitable customer relationships.
However, creating these relationships takes work. Seller must search for buyers, identify their
needs, design good market offerings, set prices for them, promote them, and store and deliver
them.
The figure shown below describes the main elements in a marketing system. Marketing
involves serving a market of final consumers in the face of competitors. The company and
competitors research the market and interact with consumers to understand their needs. Then

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they create and sent their market offerings and message to consumers, either directly or
through marketing intermediaries. Each party in the system is affected by major environmental
forces (demographic, economic, natural, technological, political, and socio/cultural).

Each Party in the system adds value for the next level. The arrows represent relationship that
must be developed and managed. Thus, a company’s success at building profitable
relationships depends not only on its own actions but also on how well the entire system
serves the needs of final consumers.
Example: Walmart cannot fulfill its promise of low prices unless its suppliers provide
merchandise at low costs. Ford cannot deliver a high-quality car-ownership experience unless
its dealers provide outstanding sales and service.

DESIGNING A CUSTOMER-DRIVEN MARKETING STRATEGY

Once it fully understands consumers and the marketplace, marketing management can
design a customer-driven marketing strategy. We define marketing management as the art
and science of choosing target markets and building profitable relationships with them.
To design a winning marketing strategy, the marketing manager must answer two important
questions:

1. What customers will we serve (target market)

2. How can we serve the customers best (value proposition)

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1. Selecting Customer to Serve

The company must first decide whom it will serve. It does this by dividing the market into
segments of customers (market segmentation) and selecting which segments it will go after
(target marketing). Some people think of marketing management as finding as many
customers as possible and increasing demand. But
marketing managers know that they cannot serve all
customers in every way. Instead, the company wants
to select only customers that it can serve well and
profitably. Ultimately, marketing managers must
decide which customers they want to target on level,
timing, and nature of their demand. Simply put,
marketing management is customer management
and demand management. Image taken from: NicheMktg

2. Choosing a Value Proposition

The company must also decide how will it serve targeted
customers – how will it differentiate and position itself in
the market place. A brand’s value proposition is the set
of benefits or value it promises to deliver consumers to
satisfy their need. At AT&T its
‘’Your World. Delivered’’ whereas with BMW promises
‘’the ultimate driving machine.’’
Image taken from: Stevebizblog.com

Such as value propositions differentiate one brand from

another. They answer the customer’s
questions, ‘’Why should I buy your brand rather than a competitor’s?’’ companies must design
strong value proposition that give them the greatest advantage in their target markets.
Example: The Smart car is positioned as compact, yet comfortable; agile, yet economical;
and safe, yet ecological. It’s ‘’sheer automotive genius in a totally fun, efficient package. Smart
thinking, indeed.’’

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MARKETING MANAGEMENT ORIENTATIONS
Marketing management wants to design strategies that will build profitable relationship with
target consumers. But what philosophy should guide these marketing strategies? What weigh
should be given to the interest of customers, the organization, and society? Very often, these
interest conflict.
There are five alternative concepts under which organizations design and carry out their
marketing strategies:
1. The production concept

2. The product concept

3. The selling concept

4. The marketing concept

5. The societal marketing concept

1. The Production Concept

The production concept holds that consumers will favor products that are available and highly
affordable. Therefore, management should focus on improving production and distribution
efficiency. This concept is one of the oldest orientations that guide sellers.

Example: computer maker Lenovo dominates the highly

competitive, price-sensitive Chinese PC market though low
labor cost, high production efficiency, and mass distribution.
However, although useful in some situations, the production
concept can lead to marketing myopia. Companies adopting
this orientation run a major risk of focusing to narrowly on
their own operations and losing sight of the real objective –
satisfying customer needs and building customer
relationships.
Image taken from: Gandgetsnow

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2. The Product Concept
The product concept holds that consumers will favor
products that offer the most in quality, performance,
and innovative features. Under this concept,
marketing strategy focuses on making continuous
product improvements.
Product quality and improvement
are important parts of most marketing strategies.
However, focusing only on the company’s products
can also lead to marketing myopia. For example, some manufacturers believe they can build
a better mousetrap, the world will beat a path to their doors. But they are often rudely shocked.
Buyers may be looking for a better solution to a mouse problem but not necessarily for a better
mousetrap. The better solution might be a chemical spray, an exterminating service, a house
cat, or something else that works even better than a mousetrap.
Furthermore, a better mousetrap will not sell unless the manufacturer designs, packages, and
prices it attractively.

3. The Selling Concept

Many companies follow the selling concept, which
holds that consumers will not buy enough of the firm’s
products unless it undertakes a largescale selling
and promotion effort. The selling concept is typically
practiced with unsought goods – those that buyers do
not normally think of buying such as an insurance or
even blood donations. These industries must be
good at tracking down prospects and selling them on
a product benefit.
Image taken from: Marketing91

4. Marketing Concept
The marketing concept holds that achieving
organizational goals depends on knowing the needs
and wants of target markets and delivering the
desired satisfactions better than sales and profits.
Instead of product-centered ‘’make and sell’’
philosophy, the marketing concept is a customer-
centered ‘’sense and respond’’ philosophy. The job
is not to find the right customer for your product but
to find the right product for your customers.

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 Image taken from: GoGraph.com

5. The Societal Marketing Concept Image taken from: Youtube

The societal marketing concept

questions whether the pure marketing concept
overlooks possible conflicts between consumer short-
run wants and consumer long-run welfare. Is a firm that
satisfies the immediate needs and wants of target
markets always doing what’s best for its consumers in
the long run? The societal marketing holds that
marketing strategy should deliver value to consumers in
a way that maintains or improves both the consumer’s
and society’s well-being.
Consider today’s bottled water industry. You may view bottled water companies offering a
convenient, tasty, and healthy product. Its packaging suggests ‘’green images’’ images of
pristine lakes and snow-capped mountains. Yet making, filling, and shipping billions of plastic
bottles generates huge amounts of carbon dioxide emissions that contribute substantial
recycling and solid waste disposal problem. Thus, in satisfying shortterm consumer wants, the
bottled water industry may be causing environmental problems that run against society’s long-
run interests.

PREPARING AN INTEGRATED MARKETING PLAN AND PROGRAM

The company’s marketing strategy outlines

which customers it will serve and how it will create
value for these customers. Next, the marketer
develops and integrated marketing program that
will actually deliver the intended value to target
customers. The marketing program
builds customer relationships by
transforming the marketing strategy into action. It
consists of the firm’s marketing mix, the set of
marketing tools the firm uses to implement its
marketing strategy.
Image taken from: nicePNG

The major marketing mix tools are classified into four broad groups, called the four P’s of
marketing: product, price, place, and promotion. To deliver on its value proposition, the firm
must first create:

• A need-satisfying market offering (product)

• Decide how much it will charge for the offering (price)

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 • How it will make the offering available to target consumers (place)
• Communicate with target customers about the offering and persuade them of
its merits (promotion)
The firm must blend each marketing mix tool into a comprehensive integrated
marketing program that communicates and delivers the intended value to chosen customers.

TRADITIONAL APPROACHES IN MARKETING

Of course, the product and your services do matter, but any child can tell you that good
marketing can hide the flaws of your product, while emphasizing the strengths, which is
something you can see every time you turn your TV or browse the web, and this is why the
importance of marketing cannot be understated. An investment into a good marketing
campaign can pay back itself but finding a good one can be a difficult task.
Old school marketing methods include TV and radio commercial, sharing of fliers and so on.
How much TV ads cost in the Philippines?
A 30-second TV commercial costs around P500,000.00 to P800,000.00 and a small
image ad in a local newspaper would be somewhere around P20,000.00 to P50,000.00. Some
of the big companies spend 4 to 20 Billion pesos yearly on TV ads alone.

A billboard lease in EDSA for example can cost your company somewhere in the
vicinity of P300,000.00 to P500,000.00 per month

Now, compare this to digital marketing: in one of the Google

Adwords campaign that we are running, we can get as much as
120,000 impression and around 300 clicks for the price of P500.00.
In a Facebook Ads campaign, we got a REACH of 45,000 and a
post engagement of 574 for only 450.00.00. That is less than P1
per engagement.

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 You as a marketer, what will you prefer?

GOALS OF MARKETING
Marketing goals communicate a broad direction for the
department. The managers review the total company
goals and identify ways that the marketing department
supports those goals. Each supporting action represents
a goal for the department to continue and improve on. For
example, a company goal of increasing revenue might
correlate to a marketing goal of increasing awareness for
new products. These goals provide a direction for the
marketing department to
follow. Image taken from: ClickDimensionBlog

CONTEMPORARY APPROACHES TO MARKETING

The contemporary approaches of marketing followed by leading organization include
Relationship Marketing, Industrial Marketing, and Social Marketing.
1. Relationship Marketing helps organizations to maintain healthy relationship with their
customer.
2. Industrial Marketing is a B2B process. It helps business to frame strategies that serve
the needs of corporate customers.

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3. Social Marketing is the newest among the marketing approaches that serve and
organization with effective techniques and tools to reach specific goals.

Textbook Reference:
Principles of Marketing, 2018 by: Marivic Francisco Flores, DBA,

ACTIVITY 1.1

Name: Date:
Session: Score:

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INSTRUCTION: In the table provided below, list down at least five examples of a tool
that can be used for traditional and contemporary approaches to marketing.
Traditional Approaches to Marketing Contemporary Approaches to Marketing

Example: Fliers Example: Google ads

1. 1.

2. 2.

3. 3.

4. 4.

5. 5.

ACTIVITY 1.2

Name: Score:
Session: Date:

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INSTRUCTION: Name and describe at least one existing company that adopts or practice the
five marketing management orientations. (5 points each)
The Production Concept Name The Selling Concept
of the company: Name of the company:
___________________________ ___________________________

Why do you think that this company is Why do you think that this company is
currently practicing the production concept? currently practicing the selling concept?

The Product Concept Name The Marketing Concept Name

of the company: of the company:
___________________________ ___________________________
Why do you think that this company is Why do you think that this company is
currently practicing the product concept? currently practicing the marketing concept?

Societal Marketing Concept Name of the company: _______________________

Why do you think that this company is currently practicing the product concept?

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 ACTIVITY 1.3

Name: Score:
Session: Date:

A.
INSTRUCTION: Think about creating your desired product to sell/introduced in the market
and provide the following that may affect your value proposition:
Trade Name or Company Name Official Tagline/Slogan of the Company

Example: Jollibee Example: ‘’Bida ang Saya’’

Brand or Product’s Name Tagline/Slogan of the Product

Example: Jolly Spaghetti Example: ‘’the meatiest, cheesiest spaghetti’’

B.
INSTRUCTION: List down five successful company in the market together with their official
tagline/slogan.
Name of the Company The Company’s Slogan or Tagline

Example: McDonald’s Example: ‘’love ko to’’

1.

2.

3.

4.

5.

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III. ASSESSMENT

Name: Score:
Session: Date:

A. True or False

INSTRUCTION: Write the word TRUE if the statement is correct and FALSE, if the statement
is incorrect.

____________1. Good marketing can hide the flaws of the product.

____________2. Relationship marketing is the newest among the marketing approaches

that serve an organization with effective techniques and tools to reach
specific goals.

____________3. Many sellers pay more attention to the benefits and experience produced
by these products rather than specific products offered.

____________4. Marketers must be careful to set the right level of expectations

____________5. The concept of exchange and relationship leads to the concept of market.

____________6. A brand value proposition is the set of benefits or values it promises to

deliver to consumers to satisfy their needs.

____________7. Marketing goals do not communicate a broad direction for the department.

____________8. The most basic concept underlying marketing is that of human wants.

____________9. Today’s marketing must be understood in the old sense of making a sale.

____________10. Sound marketing is critical to the success of every organization.

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B. Identification

INSTRUCTION: Identify what is being referred to.

____________1. It helps organization to maintain healthy relationship with their customer

____________2. It holds that achieving organizational goals depends on knowing the needs
and wants of target markets and delivering the desired satisfactions better than
sales and profits
.
____________3. It holds that consumers will favor products that are available and highly
affordable.

____________4. It is the art and science of choosing target markets and building profitable
relationship with them.

____________5. It refers to the set of actual and potential buyers of a product or service.

____________6. It is the act of obtaining desired object from someone by offering

something in return.

____________7. It means paying more attention to the specific products they offer than to
the benefits and experienced produced by these products.

____________8. The form of human needs takes as they are shaped by culture and
individual personality.

____________9. Some combination of products, services, information or experiences

offered to a market to satisfy a need or want.

____________10. This will occur when wants are backed by buying power.

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