NEEDS

Theory of Motivation a. Abraham Maslows Hierarchy of Needs

SELF-ACTUALIZATION (fulfillment, contented, maximizing your FULL potentials) ESTEEM NEEDS (recognition by others) SOCIAL NEEDS (friendship, relationships, belongingness) SECURITY NEEDS (pre-need plans, insurance) PHYSIOLOGICAL NEEDS (basic needs)

b. Alderfer Growth Relatedness Existence

WANTS
-

Form taken by the need as it is influenced by culture and personality. need + culture + personality

Examples Need to go to school Want via LRT, via car, via taxi, etc. Thirsty Tea / Water
Coke

Chinese
American

Hungry Dumplings, Siopao

Burger

DEMAND
Collective wants of consumers wants + money

MARKET
There is a demand and also a purchasing power Set of actual and potential buyers demand + demand + demand + demand + .

INDUSTRY
Set of sellers

PRODUCT
Satisfies needs or wants Products (Tangible) and services (Intangible)

SATISFACTION
Satisfied o When expectations are met o When needs are met Dissatisfied o Did not meet expectations o When wants are not met Satisfaction o Actual Expectations Dissatisfaction o Actual Expectations

SERVICE
A type of product

PRICE
Money, worth of a product Worth of a product in terms of money, currency
(Book Definition) Over-all

VALUE
capacity of a product to satisfy a persons needs and wants Importance, significance Ex. A Php2000 tissue paper is very valuable if you have a diarrhea and its the only option

EXCHANGE OF VALUES
You exchange money because what you exchange over money is more valuable than money. Happens because one party believes in the value of the product over the money they used to pay. The seller believes that the money they receive for exchanging their product is worth it.

MARKETING
Social process, managerial processes where in people obtain what they need and want by creating, offering, and exchanging products of value with others.

MARKETING MIX / 4Ps OF MARKETING

1. 2. 3. 4. Product Price Place / Placement Promotions

5 MARKETING PHILOSOPHIES
1) Production concept - produce as efficiently as possible to be able to sell at a lower price - low cost of production lower price of products 2) Product concept - In order to sell more develop the quality and features of the product. 3) Selling concept - In order to sell more you should promote the product - Promotions, communicating with the people, sales talk 4) Marketing concept - In order to sell more you should satisfy the needs and wants of the consumers

5) Societal Marketing concept - Building public respect - Welfare of the whole society - Giving importance to CSR (Corporate Social Responsibility)

MARKETING MIX / 4PS OF MARKETING 1. PRODUCT

A product is not only the physical of it 3 LEVELS OF PRODUCT > Core Product - satisfies the need / core benefit / satisfies the needs in Maslows - Example. Rolex status symbol and esteem needs > Actual Product - tangible product, parts, feature, design, attributes, ambiance > Augmented Product - additional benefits, warranties, maintenance
Augmented Actual Core

PRODUCT CLASSIFICATIONS 1. Consumer products - bought by the end consumers for final consumption A. Convenience product - products that consumer buys frequently and immediately with a minimum of comparison and buying effort - physiological needs a. Staple - ex. Rice, bread, vegetable b. Impulse - normally did not think to buy but you bought because you see it - ex. Chocolate, candies, souvenirs c. Emergency product - things that you dont really think of buying until you need it - ex. Band-Aids, Betadine, B. Shopping product - less frequently purchase products that consumers compares suitability, quality and price - social needs a. Homogeneous - basically the same, similar - ex. Refrigerator, Aircon, Appliances b. Heterogeneous - not the same - ex. Clothes, Shoes

C. Specialty product - consumer products with unique characteristics and brand identification for which a significant group of buyers is willing to make a special purchase effort. - you go out of your way just to buy the product - premium brands - esteem needs D. Unsought product - products you dont normally look for. - they do not think of buying - security needs 2. Business products A. Materials and Parts a. Raw Materials - natural products b. Parts B. Capital Items - Installations - Accessory equipment C. Supplies and Services - Office Supplies - Maintenance - Repair

PRODUCT LINE - set of products that are related to each other - to have options because people have different preferences - to satisfy the needs and wants of consumers - Ex. Burger of Mcdo has different flavors INDIVIDUAL PRODUCT LINE DECISIONS 1. Product Attributes - adjusting the following A. Features - characteristics; ex. Operating System B. Quality - when a product meets the requirement/expectations of the consumers then it has high quality C. Design 2. Branding A. Brand - a name, term, sign, symbol or design or a combination of these intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors. It is a sellers promise to deliver consistently a specific set of features, benefits, and services to buyers. - start from Europe; to identify the cows they owned in the field where all of the cows of other farms are also there - conveys 4 levels of meaning: a. Attributes appearance; physical / outer appearance b. Benefits other benefits than its major use; ex. Watch tells time but tells dates, water resistance etc. c. Values prestige; education; intangible d. Personality classy

B.

C.

D.

E.

- Trademark - when you recognized the measure and feature of the brand / logo Brand Equity - the value of a brand based on the extent to which it has high brand loyalty, name awareness, perceived quality, strong brand associations and other assets such as patents, trademarks and channel relationships. - value of a brand - high brand equity = you can command prices = loyal customers = customers look for you = you can lessen expenses on promotions Brand Name Selection - should suggest something about the Product, Benefit and Quality - should be distinct - should be easily translated to different languages - capable of product registration and legal protection - easy to pronounce - easy to recognize - easy to remember - products benefit and quantity - proposed marketing strategy - target market Brand Sponsor - ownership a. Manufacturers Brand - a band created and owned by the producer b. Private Brand - a brand created and owned by a reseller of a product or service - ex. National Bookstore Best Buy SM Bonus c. Licensing - securing accreditation from one company to use names, symbols, characters, etc. previously created for a fee to provide an instant or proven brand name - if logo has higher value, the product will be easily sold d. Co-branding - two established brand names used for the same products at the same time - ex. Tide with Safeguard Brand Strategy - used to get ahead to others a. Line Extension - same category, same brand - same product, different variations - ex. Toothpaste with different flavors b. Brand Extension - new category, same brand - ex. Samsung tv, Samsung mobile phone, Samsung refrigerator c. Multi-branding - same category, new brand - to have different target people with different needs and wants - to cater different types of people - ex. Uniliver have different detergents Coke have royal and sprite

Jollibee has Chowking, Greenwich d. New Brand - new category, new brand - ex. If LaSalle sells a juice named C3 Brand Strategy
Same Category Same Brand New Brand New Category

Line Extension Multi-brand

Brand Extension New Brand

UNIQUE SELLING PROPOSITION (USP) - Tagline 3. Packaging - the container of the product - Functions of the package: a. For Protection to prevent wastage, breakage of the product b. For Promotion highlighting or putting features of the product, uniqueness c. For Enhancement convenience in the part of the consumers - Label - name that presents the product, tagline, ingredients 4. Product Support Services - customer service - augmented product

PRODUCT MIX / PRODUCT ASSORTMENT - set of all product lines and items that a particular seller offers for sale - 4 Handles of Product Mix 1. Product Mix Width different categories 2. Product Line Length different brands 3. Product Mix Depth different kinds of the same product; ex. Surf with sunflower scent and Surf with lavender scent 4. Product Mix Consistency how related the products are to each other
- ex.
Product Line Length

Detergent Surf Breeze

Uniliver Shampoo Soap Clear Vaseline Dove Dove

Deodorants Axe Dove Rexona

Product Mix Width

NEW PRODUCT DEVELOPMENT PROCESS 1. Idea Generation - Brainstorming - Sources of Idea a. Internal Sources b. Customers c. Distributors

d. Competitors e. Suppliers 2. Idea Screening - screen to spot good ideas and drop bad ideas 3. Concept Development and Testing A. Concept Development - refine the idea B. Testing - conduct FGD (Focus, Group, Discussion) - Develop a prototype - Sampling methods, use statistical tools using representation of target market 4. Develop Marketing Strategy - consider the following A. Target Market consumers B. Product Position how you want to be remembered ex. Soap na skin germ protection, its safeguard C. Sales Market Share and Profit Goals 5. Business Analysis - profit and loss, breakeven analysis, profit against expenses and investments - projections 6. Product Development - make a real product - then test it 7. Test Marketing - launch the product in a small group - produce limited quantity 8. Commercialization - introduce product to the market

PRODUCT LIFECYCLE - has 4 stages: A. Introduction Stage - sales is low, because it is not yet recognized - expenses is high, because of advertisement - profit is negative (-) - 5 stages of Adaption Process B. Growth Stage - sales is growing - expenses is still high - profit is slowly increasing or Break Even - more competition because they have gain market share - develop base demand C. Maturity Stage - sales are high - expenses is still high - profit is high - repeat purchase - to maintain; we use LINE EXTENSION D. Decline Stage - sales go down - expenses is still high

- profit is negative (-) - new product arises - they were not able to survive competition - they were not able to innovate / develop their product - Example products with product life cycle: - Crocs - Twilight Books - Play Station

Sales Expenses Profit (-)

growing

BE

(-)

STYLE casual and formal, longer/longlasting mode of expression - basic and distinctive mode of expression vs FASHION shorter mode of expression - currently accepted vs FAD one time/was in trend for a very short period of time - fashion that enters quickly - matured so fast and declines quickly - ex. Buko Juice, Milk Tea, FIVE STAGES OF ADAPTATION PROCESS 1. Awareness introduction 2. Interest 3. Evaluation compare 4. Trial purchase 5. Adaptation use of the product FIVE ADAPTION CATEGORIES 1. Innovators - people who will try the product first - willing to take risks to try new product 2. Early Adaptors - adapt product with care guided by opinion or community leaders 3. Early Majority - during growth stage 4. Late Majority - adapt when majority has adapted the innovation

5. Laggards - traditional, everyone is using already and you only leave them with no choice because the products they are using are paced out or already not being sold or not available already in the market
DONT MAKE EVERYONE YOUR TARGET MARKET BECAUSE YOU WILL LOSE YOUR IDENTITY

MARKET SEGMENTATION - dividing a market into distinct group of buyers with different needs, characteristics or behavior who might require separate products or marketing mixes. MARKET TARGETING - the process of evaluating each market segments attractiveness and selecting one or more segments to enter MARKET / PRODUCT POSITIONING - arranging for a product to occupy a clear distinctive and desirable place in the minds of target consumers relative to competing products SIX STEPS IN MARKET SEGMENTATION, TARGETING AND POSITIONING (STP) Segmentation: 1. Identify the bases for segmenting the market categorizing 2. Develop profiles of resulting segment Targeting: 3. Develop measures of segment attractiveness 4. Selecting the target segment Positioning: 5. Develop positioning for each target segment 6. Develop marketing mix for each target segment LEVELS OF SEGMENTATION: 1. Mass Marketing - seller engages to mass production, promotion, distribution of one product for all - try to sell to as many people as possible - lower cost, lower price, sell more 2. Segment Marketing - A company that practices segment marketing recognizes that buyers differ in their wants, purchasing power, geographical locations, buying attitudes, buying habits, the company, therefore, tries to isolate broad profitable segments that make up a market - Identify large groups of people in a market 3. Niche Marketing - A niche is a more narrowly defined group typically a small market whose needs are not being well served. Marketers usually identifies niches by dividing a segment into sub-segments or by defining a group with a distinctive set of traits who may seek a special combination of benefits - Ex. Toothpaste without fluoride, airline food that are sterilized 4. Local Marketing - Marketing programs are given/offered to a local place or for locals - Ex. Different languages of flyers for different provinces in the Philippines 5. Individual Marketing - Trying to serve a market for a segment of one - Ex. A painter who paints a portrait of a single person

1st step in Market Segmentation, Targeting and Positioning BASES FOR SEGMENTATION OF CONSUMER MARKETS 1. Geographic Segmentation - segmentation according to geographic differences - different regions have different subculture, climate, environment, traits, and etc. 2. Demographic Segmentation - basic demographic segmentation: a. Age determine preferences (must be a close range) b. Gender who will benefit the most of the product c. Education level of comprehension (simple, friendly to buyers and end users) d. Location determines how you behave, determines socioeconomic class e. Income purchasing limit f. Occupation aspirations in life (not only what they deserve) - age specific number, preferences change over time, lifestyle change over time - lifecycle stage with year bracket, preferences change over time, lifestyle change over time - education make advertising or communication to customers SIMPLER, USER FRIENDLY 3. Psychographic Segmentation - mindset of people - Lifestyle in terms of: a. Activities what you do b. Interest what you like to do c. Opinion 4. Behavioral Segmentation a. Occasions - Behavior of people base on occasion - Ex. During Christmas people buy more b. Benefit Sought - According to what benefit you can get c. User status / usage rate - Frequency d. Loyalty Status - Hardcore AAAAA one product - Switches ABCDE shifting from one product to another - Shifting Loyals AAA to BBB shifts - Split-loyals ABABAB 2 products e. Buyer readiness stage - aware, prepared, informed, interested, desire f. Attitude (like/dislike) - enthusiastic - positive - hostile - negative - indifferent Choosing an endorser people want REQUIREMENTS FOR EFFECTIVE SEGMENTATION a. Measurable - can be quantify b. Substantial - big enough to be profitable c. Accessible - Can be reached

d. Differentiable - You can differentiate one segment from the other e. Actionable - You can create programs to serve segments EVALUATING MARKET SEGMENTS 1. Determine attractiveness in terms of: a. Size b. Growth c. Profitability d. Risk e. Scale Economies 2. Determine structural attractiveness of the segment - industry that it moves in (sellers of the product) - Porters 5 forces model: a. Threat of substitutes replacements b. Threat of new entrants is the barriers to entry high or low (cost of investment) c. Bargaining power of suppliers if there is no other suppliers d. Bargaining power of customers (buyers) if there is are many competitors selling the same product e. Threat of intense segment rivalry 3. Long term goals and objectives of the company SELECTING MARKET SEGMENTS - Five Patterns 1. Single segment concentration - one product for one segment Segment S1 S2 S3 P1 X Product P2 P3 2. Selective Specialization - totally unrelated to each other - a different product for each of the different segments Segment S1 S2 S3 P1 X Product P2 X P3 X 3. Product Specialization - one product for different segments - example: cotton, yakult Segment S1 S2 S3 P1 Product P2 P3 X X X

4. Market Specialization - one area/segment, many products - ex. Jollibee food industry with different food products Segment S1 S2 S3 P1 X Product P2 X P3 X 5. Full Market Coverage Segment S1 S2 S3 P1 X X X Product P2 X X X P3 X X X DIFFERENTIATION - The act of designing a set of meaningful differences to distinguish the companys offer that of their competitors - Making product distinct from others or from competitors - Perception of people towards the product against your competitor - 5 basic dimensions of differentiation: a. Product b. Service c. Channel d. Image e. Personnel - Product differentiation a. Attributes b. Quality - Performance Quality functioning how they should function - Conformance Quality consistence c. Durability - life span d. Reparability - Can be fix e. Style - how it looks - Design - Over all - Service differentiation a. Ordering ease - convenience b. Delivery - time of delivery - care quality of the product c. Installation - ex. Cable, Wifi d. Customer training - demos, how to use e. Customer consulting f. Maintenance and Repair

- Personnel differentiation - train your employees a. Competence b. Courtesy c. Responsiveness d. Reliability e. Credibility