CHAPTER 1: An Overview of Marketing

Making goods, however, is one thing; making sure that they are bought is another. To
facilitate the implementation of the latter, a new tool was invented which came to be
known later as marketing.
Competition is the mark of a capitalist economy. If the bus company previously cited
prefers to stay competitive, it must adapt a marketing outlook that will generate
relevant customer information, so that, appropriate strategies may be formulated.
Market penetration is one of the concerns of avid practitioners of marketing. It may
be worth studying various theories and practices related to such topic.
What is marketing?
It is the exchange activities conducted by individuals or organizations of
purpose of satisfying human wants with the view of accomplishing individual
and organizational objectives.
Definition of Basic Marketing Terms
Exchange. This term refers to the trade of things or service of value between buyer
and seller.
Human Needs. This term refers to thing or service that is required by a human being
for the health and well-being of his body and mind.
Human Want. When a person has an unfulfilled need, and he is aware of an object
that will best satisfy the need, and the object is still not in his possession,
Objective. The desired result of an activity is called objective an example of
objective is profit which us desired by the business person.

The Marketing Concept

This calls for identifying the needs of customers first before any move is
made. It is identifying the wants and needs of the customer before putting up
business.
Marketing Strategy and Marketing Concept
To implement the marketing concept, the formulation of marketing strategy is
required.
The Marketing Variables
2 types of Variables:
(a) The Marketing Mix Variables. Consists of the product, the price, the
promotion, and the place.
(b) The Marketing Environment Variables. Consists of social forces,
economic forces, technological forces, competitive forces, and
regulatory forces.

CHAPTER 2: The Consumer Behavior

One of the most important aspects of knowledge that the marketer must have is that
one concerning consumer behavior. Marketing will be a little difficult if the marketer
knows how consumers behave.
The Purchase Decision Process
As the marketer is always confronted with the problem of selling, the
consumer is also most often confronted with buying problem.
Stages of Consumers Buying Process
A. Problem Recognition. Recognize the problems.
B. Consumer Information Processing. After recognizing his need, the
consumer who is properly motivated attempts to conduct an information
search.
C. Evaluation of Alternatives. The objective of information search is to put up a
list of alternatives that the consumer thinks as worthy solutions to his problem
D. Purchase. What to buy? When to buy? Where to buy?
E. Post-purchase Evaluation. How satisfied he is with the product.
Factors Affecting Consumer Buying Behavior
The consumers buying behavior is affected by three factors: (1)
psychological variables; (2) social influences; and (3) the purchase
situation
The Consumer and Psychological Influences
The buying behavior of the consumer is affected by psychological variable
consisting of motivation, perception, learning, attitudes and lifestyle.
a. Motivation. Everyone including the consumer makes a purchase decision
drive stimulus. The need that moves a person to action is called drive

b. Perception. People see, hear, taste and feel differently. What may be
beautiful to one may not be so to another person.
c. Learning. A change in behavior occurring as a result of past experience.
d. Attitudes. The buying behavior of the consumer is also affected by this
attitude.
e. Lifestyle. The consumers purchasing decision is influenced this. It is the
individuals mode of living.
Social Influences
The consumers buying behavior is also influenced by his relationships with other
people.
a. Personal Influence. The views and opinions of others oftentimes influence
the purchasing decision of the consumer.
b. Reference Groups. Groups of people that are looked upon by a concerned
member when forming an attitude about a topic.
c. Social Class. Group of people who have approximately equal position as
viewed by others in the society.
d. Culture. The beliefs, values and attitude patterns shared by the members of
the society and are passed to the next generation trough socialization.
The Purchase Situation
It consists of the (a) purchase task, (b) the social surroundings, (c)
physical surroundings, (d) temporal effects and (e) antecedent states.

CHAPTER 3: The Buying Behavior of Organizational Markets

What are Organizational Markets?
Organizational markets are those that buy goods for production purpose or for
reselling.

1.
2.
3.
4.

Industrial markets
Reseller markets
Government markets; and
Nonprofit organizational

Industrial Markets
Organizational that requires goods and service for the purpose of producing
goods or services are called industrial markets.
Reseller Markets
Reseller markets are organizations that buy goods and services which they
later sell at a profit.
Government Markets
Government agencies that buy products and services for use in the
production of public and services.
Nonprofit Organizations
Nonprofit organizations are nongovernmental organizations that serve their
customers but do not have profits as organizational goal.
Organizational Buying and Its Characteristics
Organizations and buying individual consumers differ in many ways including
1.
2.
3.
4.
5.
6.
7.

those related to buying.

Demand
Potential buyers
Buying objectives
Buying criteria
Size of order or purchase
Buyers-seller interaction
The buying center

Evaluation and selection of suppliers

1.
2.
3.
4.
5.
6.

The quality of goods or service being considered for purchase;

The characteristics and needs of the buyer;
The suppliers ability to meet quality standards;
The suppliers ability to meet delivery schedules;
The price; and
The technical capability of the supplier.

Organizational markets are alternative markets for the markets for the marketer.
Their buying behavior is unique and different from those of costumer markets.
Organizational markets are those that buy goods or services for resale or for
production. Organizational markets are classified as; (1) industrial markets (2)
reseller markets; (3) government markets and (4) nonprofit organizations.
Organizational buying behavior is unique when the following are considered
demand, potential buyers, buying objectives, buying, buyer-seller interaction and the
buying center.

CHAPTER 4: Market segmentation and Targeting

What is Market?
The place is stressed with the definition market is a place where sellers and
buyers exchange goods upon an agreed price a group of people or
organizations that buy a particular good service or concept.

 A market is composed of people with needs to satisfy, the money to spend,

the willingness to spend, and the ability to satisfy the objectives of the seller.
Types of market
Market may be classified according to; (1) type of institution; and (2) form
Markets according to type of institution
1. Consumer Markets. Who intend to directly consume a product or service
constitute the consumer market.
2. Organizational Markets. Buyer of products or services whose intention is to
produce another product or service.
3. International Markets. This refers to all types of buyers found abroad
including consumers and organizations.
Markets According to Form
Markets may also be classified according to form. These are (1) the primary; and (2)
the secondary markets.
1. Primary Markets. This is the type of market that is formed when a firm
introduces a new product class.
2. Secondary Markets. This type is an offshoot of the primary market and it is
formed when customers develop specific needs or preferences.
Market Segmentation
A market segment is a sub-group of a particular market which is composed of
units with more or less similar characteristics.
Market segmentation may be defined as the process of identifying the various
segments of a companys particular market.
Selecting Target Markets

1. Size. In choosing a market segment, it must be large enough to be worth

serving. Size, however, does not necessarily refer to the number of potential
buyers.
2. Expected growth. there are markets that are not currently attractive but
some of these may be expected to grow
3. Competitive position. The presence of competition in the segment
considered lowers the firms chance of successfully.
4. Cost of reaching the segment. A market segment that is chosen must be
easily reached by the firm.
5. Compatibility with the firms objectives and resources. If the firm does not
have enough resources to serve.
Segmenting and targeting market are marketing activities that re undertaken to
maximize sales and profits. A market may be defined as that one composing of
people with needs to satisfy, the money to spend the willingness to spend and ability
to satisfy the objectives of the seller.

CHAPTER 5: Marketing Research and Information Systems

What is a Marketing Information System?
A marketing information system (MKIS) is a structure consisting of people
equipment and procedures to continually gather and analyze data to provide
marketing managers with information they need to make decisions.
1. To define the information requirements to the marketer
2. To develop the needed information and
3. To distribute the information at the time they are needed.
Internal Records

Internal records are highly useful to the marketing decision market. They comprise
the following:
1. Accounting records- like financial statements sales and orders, costs,
accounts receivable and cash flows
2. Manufacturing records- like production

schedules

shipments

and

inventories;
3. Sales department records- like sales force call report
4. Customer service department records- like report on customer satisfaction
and warranty problems; and
5. Information gathered by other departments.
The Marketing Research Process
The marketing research process consists of five steps, namely:
(a) Definition of the problem- The first step towards solving a problem is the
recognition that such problem exist.
(b) Situation analysis- Once the problem has been clearly identified; a situation
analysis must be conducted.
(c) Obtaining primary data- a formal research to obtain primary data
requirements.
(d) Interpretation of data- bringing out the meaning of data, or converting mere
data into information.
Decision-making for marketers will be a lot easier if they are provided with
information that is right for their needs. Information moreover, should not be only
right; it must also be timely. This is possible if effective marketing research and
information system are installed.
The marketing information is designed to define the information needs the marketer
to develop information that will information needs of the marketer, to develop
information that will address the identified need, and to distribute them to the
concerned parties.

CHAPTER 6: The Product

What is a Product?
A product is anything offered for sale by a firm to buyers to satisfy their wants
and needs.
Classification of Products
Products may be classified into two categories: (a) consumer goods; and (2)
industrial goods.
(a) Consumer goods- intended for final consumption by consumers.
(b) Industrial goods- it can be categorized as installations, accessory equipment,
raw materials, component parts and materials, supplies, or services.
Branding
The marketing action which identifies and helps differentiate the goods or
services of one seller from those of another. A consumer who users a product
and begins to like it, will find less difficulty in purchasing the product again if
he is provided with a brand to remember.
Brand
A brand is a name, term, sign, symbol, or design that is intended to identify
the goods or services of one seller or group of sellers. Legally registered

brands that are provided with legal protection is called trademark. Brand
name is that part of brand consisting of words, letters, and/or numbers that
can be vocalized while Brand Mark is that part of brand that appears in the
form of a symbol, design, or distinctive coloring or lettering, which cannot be
vocalized.
In selecting a brand, these must be considered:
(a) The brand should suggest something about the products benefit and
qualities.
(b) Easy to pronounce, recognize, spell and remember.
(c) Distinctive
(d) Adaptable to additional product lines
(e) Capable of being legally registered.
Packaging
It refers to all activities involved in designing and producing the container or
wrapper for a product. Packaging is useful marketing activity because it
serves various purposes like providing protection to products, convenience to
the user, safety, economy, and effective promotion of the product.
Labeling
Provides information about the product and manufacturer is called as label. It
can be a part of the package or a tag attached to the product.
Product Warranty
Manufacturers written promise as to the extent of the repair, replacement, or
otherwise compensation for defective goods. It may either be:
(a) Express Warranties- written statement of manufacturers statement indicating
for product deficiencies. It can be limited-coverage warranty or full warranty.
(b) Implied Warranties- assign responsibility product deficiencies to a
manufacturer even if the item was sold by a retailer.
Products have life cycle consisting of four distinct stages: introduction, growth,
maturity, and decline.

CHAPTER 7: The Price

The Meaning of Price
It is the money, good, or service exchanged for the ownership or use of a
good or service. The activities involved in the determination of the price at
which products that will be offered for sale.
The objective of pricing could either be profit-oriented, sales oriented, or
status quo-oriented.
Price adaption strategies consist of geographical pricing, price discount and
allowances, promotional pricing and discriminatory pricing.
Pricing Approaches
Price of products and services may be set based on any of the various pricing
approaches. They are the following.
1. Cost based approach
2. Buyer based approach, and
3. Competition based approach.
Cost Based Approach
The cost based approach in pricing refers to the setting of prices on the
basis of costs.
1. Cost plus pricing, and
2. Target rate of return pricing.

Buyer Based Approach

The buyer based approach of pricing deals with consumer perception or
behavior as bases for determining the selling price of a product or service.
Price Discount
Discounts and allowances are price modification designed to reward
customers for early payment volume purchase, and off season buying.
1. Cash discount. These are reductions in price to encourage buyers to pay .

2.
3.
4.
5.

Quantity discount. These are reduction in unit costs for a larger order.
Functional or trade discount. Reward
Seasonal discount. Buyer who buy goods or services out of season
Allowances. These are reduction from list prices to buyer.

Pricing under various Market Conditions

1. Pure monopoly.
2. Oligopoly
3. Pure competition
4. Oligopoly
5. Monopsony
The pricing procedures consist of determining realistic range of choice, selecting
pricing strategy, evaluation, evaluation economic feasibilities and setting the price.
Pricing will depend much on the competition situation which could either be a pure
monopoly, oligopoly, pure composition, oligopoly or monopsony.

CHAPTER 8: Marketing Channels

Marketing channels are the conduits used by the firm to distribute product.
Channels make it easier for the firm to reach their intended users at the time and
place they desire. Apart from the said feature, there are other functions that may be
attributed to marketing channels.
The Nature and Functions of Marketing Channels
Product the firm must between the firm and its customers must be closed by a
facilitating tool called marketing channels. A marketing channel
interdependent organization individual that facilitate the movement and
transfer of ownership of commodities from the producers to the ultimate users.
Functions of the Marketing Channels
1. They routinize decisions and work
2. They finance the process for moving goods from the producers to the
consumer
3. They are active participants in the pricing process
4. They serve as a channel of communication between the producers and the
consumer.
5. They assist in the promotional aspect of marketing
6. They minimize the number of transactions in the system
Types of Marketing Channels
1. Consumer channels

2. Industrial channels
Consumer channels
Consumer channels are those that are used in the distribution of consumer
goods.
The Channel Selection Process
1.
2.
3.
4.
5.
6.

Identification of target customers

Determination of consume buying habits regarding the goods
Determination of the location of the potential customers
Listing of channel alternatives
Evaluation of channel alternatives
Selection of channel members

Factor that Influence Channel Selection

1. The nature of the product- will determine which channel of distribution is
best suited. Highly expensive products like ships and airplanes, it require
more direct dealing with users.
2. The nature of the market- Buyers of a certain product are scattered
throughout the country, so the manufacturer will have to choose a channel
that will serve his particular market.
3. The nature of the company- its organizational set-up will also be a factor in
selecting a channel. Large companies can afford to adapt even a multichannel approach in its distribution activities.
Distribution Strategies
Decisions must be made by the firm on how broadly or narrowly its
products will be distributed. This will determine the number of
intermediaries that will be tapped.
Distribution strategies consist of three types:
1. Intensive distribution- a strategy that requires the firm to sell its products
through every available outlet in the market where a consumer might
reasonably try to find them.
2. Selective distribution- selling through only those outlets which will give the
product special attention. It decreases the number of outlets who will carry the
product.

3. Exclusive distribution- applicable to specialty products or services like

automobiles and expensive watches. The agreement is designed to help
control prices and the service offered in a channel.

CHAPTER 9: Physical Distribution

Physical Distribution
This is a very important component of the marketing effort. It is the marketing
function which facilities the movement of goods from the manufacturer to the
ultimate users.
Physical Distribution Management
The development and operation of processes resulting in the effective and
efficient physical flow of products.
This are the people assigned to ensure that physical distribution activities are
carried out.
The reduction of the cost of physical distribution without sacrificing the quality of
service can contribute to the firms profitability.
Inventory Planning and Control
Maintaining an inventory of stocks is a requirement of physical distribution.
Too much inventory is a drain on the financial resources of the firm. This is in
addition to the cost of keeping the inventory.
Too small an inventory, on the other hand, may mean lost sales.
A widely used inventory control technique is the Economic Order Quantity
(EOQ) mode.
Q= square root of 2TS/ CI
Where ------- Q= EOQ

T= total units disposed per year

S= restocking (or ordering) cost
C= cost per unit
I= annual carrying cost
Transportation
The shipping of products to customers is one of the most important activities in
physical distribution.
Forms of Transportation: Railroads, Trucks, Water Vessels, Pipelines, Airplanes.
Warehousing
An important component of physical distribution.
The places where they are kept are called WAREHOUSES, and the activity
done is called WAREHOUSING.
Types of Warehousing:
1. Private warehouse- those owned or leased by the company.
2. Public warehouse- those operated by professional warehouses which
provide storage and related physical distribution facilitates on a rental basis to
other firms.
Number and Location of Warehousing Facilities
Decisions must also be made on the number and the location of warehousing
facilities.
More warehouses would bring the products nearer the market, but
warehousing costs will increase.
Order Processing
Refers to the receiving, recording, filling and assembling orders for shipment.
The steps undertaken form the time the customer makes an order up to the
time the ordered goods are delivered is called ORDER CYCLE.
The ORDER CYCLE consists of order placement, internal order processing,
order preparation, and other shipment.

CHAPTER 10: Retailing and Wholesaling

What is retailing?
Retailing refers to the business activity of selling goods or services to the final
consumer.
Retailer is one whose business firm sells mainly to the final consumer.
Retailers in some cases sell on a nonretail basis.
Functions of Retailers
1.
2.
3.
4.
5.
6.
7.

They provide convenience;

They provide guarantee and service;
They provide financing of transactions;
They perform promotional activities;
They perform storage function;
They perform intelligence service for the manufacturer; and
They serve as buying agent of the consumers.

Retailers provide convenience, guarantee and service, and financing. They also
perform promotional activities, storage function, and intelligence service for
manufacturers. They also serve as the buying agents of consumers.
Retailers may be classified according to sales volume, product mix offered, form of
ownership, and method of operation.

Wholesaling
This is the selling of goods and services to resellers and manufacturers.
This perform certain functions such as:
a. Anticipating customer needs
b. Selling and promotion

c. Financing
d. Storage
e. Breaking bulk
f. Transportation
g. Risk-taking
Types of Wholesalers
It may be classified according to the functions they perform. They either:
Full Function Wholesalers- those who perform most, if not all of the
functions discussed above. They may be classified as:
A.1. Merchant wholesalers
A.2. Sales offices and branches
A.3. Agents
A.4. Brokers and commission houses
Industrial Wholesalers- is served by wholesalers, some of which also serve
the retailers.

Industrial Distributors
They stock products which they sell later.
They serve as customers by acting as purchasing agent, storing and
delivering goods, extending credit, providing service, and supplying
information.
They serve the manufacturers by covering his market and acting as
intelligence agent.

General Line
Industrial wholesalers carry a complete assortment of goods in a single line,
while the specialty line wholesalers carry only a limited range of products in a
given line

Combination House
This is involved in selling to both the industrial user and the retailers.