PRINCIPLES OF MARKETING

QUARTER 3 – MODULE 3
VALUE OF CUSTOMERS
AND DIFFERENTIATE
STRATEGIC AND
MARKETING PLANNING
 Customer value
is defined as the satisfaction
derived from what a customer
may experience or expect by
choosing a particular action
relative to the cost of the action.
The action can be a purchase, a
visit, an order or a sign up. The
BUILDING cost refers to anything that can
be given up to receive the

CUSTOMER VALUE desired product or service which

can be in the form of money,
time, knowledge, data or other.

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 Level of Customer Value

The levels of customer value indicate what the consumer expect and do not
expect from their purchases.
• Basic and expected levels
-These levels include the basic requirements of conducting a business. For
instance, restaurants are expected to have a spacious dining area and clean
tables and utensils. If these requirements are not met by the business, it
cannot provide highl quality customer value.
Desired customer value
-This involves what the customers want from the purchase or service
experience. This is the first opportunity for a business to get ahead of the
competition.
Unanticipated customer value
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TYPES OF CUSTOMERS
There are four types of customers based on
projected customer retention and loyalty to the
brand.

Strangers - are customers whose needs do not fit the company's offerings. The
company does not need to invest and exert effort to win them.

Butterflies - as the name implies, are not loyal to specific brand because they
keep on looking for the best deals which may lead to patronizing other brands.
The company can enjoy profits from these customers only for a short period.

True friends - have needs that match the company's offerings. They make
repeat purchases and patronize the brand as long as it satisfies their needs. The
company mist invest in these customers and strengthen its relationship with
them.

Freeloaders - are loyal but not profitable because of the limited fit between
their needs and the company's offering. For example, a few customers of a salon
patronizes its services regularly but do not generate enough profit to sustain the
Relationship Development
Strategies

Recent research shows that loyal customers prove to be more profitable than ordinary
customers. This is the reason why companies are challenged to maintain customer loyalty
Companies should practice the following relationship development strategies to retain
loyal customers

1. Communicate with customers frequently and effectively. It is important to

always get in touch with customers through e-mail and social networking sites
especially in the new normal situation. Provide various means to give immediate
feedback (e.g., online customer surveys).

2. Offer customer rewards. Customer loyalty programs, which include special

discounts, freebies, perks, may work well for various types of products and services.
These encourage customers to remain loyal to the brand because they are rewarded
for their patronage.

3. Conduct special events and provide sponsorship. Companies can hold or sponsor
parties, concerts, contests, and the like to boost interaction among loyal customers
Relationship Development
Strategies

Recent research shows that loyal customers prove to be more profitable than ordinary
customers. This is the reason why companies are challenged to maintain customer loyalty
Companies should practice the following relationship development strategies to retain
loyal customers

4. Enhance customer service. Some company outsource their services to third party
organizations to cater complaints and inquiries, promote their latest offerings and
provide technical support.

5. Utilize languages to reach a wider customer base. Marketers can create

promotional materials in different languages to cater specific regions. Consumers can
also now choose the language they would like to use to communicate with customer
service representative.
Customer Service in the Philippines Business
Enterprise
The success of our home grown companies lies not just on their offerings but
also on their customer service. Local business now utilizes customer service
tools that fit our customer- oriented culture and extensive technology usage.

1. Email and SMS -also help businesses communicate with their clientele more
easily as most consumers regularly check their inboxes.

2. Social Networking sites - aside from their primary function of connecting

people, have become a channel for netizens to ask for customer support.
Telecom Companies promptly responds to inquiries and complaints on social
media and redirects the customer to the site's private messaging system for
further assistance.

3. Live chat support -facilitates real time correspondence between customer

and the company representative
 WHAT IS
X STRATEGIC
MARKETING?
 Strategic marketing expresses the goals of the
organization that are achieved through marketing efforts,
while tactical marketing expresses the specific activities
that are needed to achieve the goals of the organization.

Strategic marketing is defined as the general plan of

action with the company vision and goals. This is
carefully thought-out course of action developed for the

STRATEGIC purpose of achieving a desired result such as profitability

and high productivity. It puts heavier emphasis on
external environmental scanning to develop strategies to

MARKETIN respond to environmental forces that that confront the

company. It is the thinking process that outlines the
course of action towards the achievement of a goal.

G Strategic marketing has longer time frame, usually three

to five years.
One type of marketing strategy is to offer more expensive and branded
products to a small number of loyal customers. Another strategy is to
offer different products, from cheap to more expensive ones, catering
to different types of customers.

For strategic marketing to work, marketers should determine the

objectives the company wants to achieve and how the outcomes will
be measured. There must be a starting point to determine where the
company is right now and where it wants to go.

According to Lambin (1993), the role of strategic marketing is "to lead

the firm towards attractive economic opportunities, that is,
opportunities that are adapted to its resources and know-how and offer
a potential for growth and profitability."
The Strategic Marketing Process

The strategic marketing process seeks to establish a clear and concerned direction for all
marketing activities of an organization. It includes plan to reach specific goals/objectives.

Figure 1: Diagram of Strategic Marketing Process

Mission Situation Objective

Identification Analysis Setting

Marketing
Strategy
Strategy
Evaluation
Developm
and Control
ent
The Strategic Marketing Process
The strategic marketing process seeks to establish a clear and concerned direction for all
marketing activities of an organization. It includes plan to reach specific goals/objective.

Step 1: Mission Identification

The Company's mission statement is articulated. A mission statement defines what
an organization is, why it exists, its reason for being, its primary customers, the
products and services its produces, and its geographical area of operation.

Step 2: Situation Analysis

This step assesses and evaluate the market, customers, competitors, and the
company's internal and external environment. The objective is to identify the
company's strengths and weaknesses, as well as the available opportunities and
threats.

Step 3: Objective Setting

Objectives are marketing targets that are Specific, Measurable, Attainable, Reliable
and Time-bound (SMART). These enable a company to control its marketing plan and
provide a consistent focus for all functions of an organization. These objectives
The Strategic Marketing Process
The strategic marketing process seeks to establish a clear and concerned
direction for all marketing activities of an organization. It includes plan to reach
specific goals/objective.

Step 4: Marketing strategy development

The development of a marketing strategy involves

market segmentation, identification of target market,
positioning, selection of board marketing strategies, and
the translation into action plan
Strategies can be broadly classified into three categories. These are Cost
Leadership, differentiation, and focused.
Cost Leadership
This is a strategy primarily for achieving low-cost leadership among industry
competitions. Cost leadership can be achieved through low-cost supply contracts,
overhead expense control, economies of scale, and comprehensive cost-cutting efforts,
among others..
Example: While 16 desk fan ordinarily retail for P1,000.00 a local appliance brand is able
to market the same at P635.00 through mass production.

Differentiation
it seeks to achieve superior product attributes and features that the different from
industry competitors. This result pronounced consumers preference for the company's
products.
Example: A mobile phone brand introduces its version of the smartphone that does not
have a keyboard but is activated and controlled by thought.

Focused
Efforts are concentrated on a relatively small but profitable market. The development of
products and services primarily ensures that the needs and wants of this market are
addressed and that satisfaction is provided. Example: A convenience store that
Cost leadership, differentiation and focused strategies are implemented through the following sub-
categories:

1. Forward integration
This involves gaining ownership or increased control over distribution of retailers.
Example: A known newspaper company buying 418 newspaper stands in Metro Manila

2. Backward integration
This involves gaining ownership or increased in control over supplies.
Example: A consumer goods company in the Philippines purchasing a cow farm and dairy facility in
General Santos City.

3. Horizontal integration
This involves purchase of or increased control over competition.
Example: A pizza company buying a controlling interest in another pizza company.

4. Market penetration
The objective of this strategy is to increase market share of current products or services in
current markets through greater and more intensive marketing efforts.
Example: A doughnut company launching a P56 million advertising campaign directed at current
customers.
Cost leadership, differentiation and focused strategies are implemented through the following sub-
categories:
5. Market Development
This strategy involves the introduction of existing products or services into a new
geographical area or market.
Example: A private learning institution opening a new campus in Cebu City.

6. Product development
This strategy involves the improvement of current products or services or the
development of new product with the purpose of increasing sales.
Example: A company on carbonated beverages introducing its product line in tetra
pack.

7. Related diversification
This involves introducing new related products or services.
Example: Battery man related production ne viter powered automotive batteries.

8. Unrelated diversification
This involves introducing new but unrelated products or services.
Example: A bank opening a chain of ice cream parlors.
Cost leadership, differentiation and focused strategies are implemented through the following sub-
categories:

9. Retrenchment
This involves halting or reversing declining sales and profits through cost or
asset reduction
Example: A shopping mall selling off its hardware department and laying off
847 of its department store employees.

10. Divestiture
This involves selling all of a company's asset as a whole, for their tangible
worth.
Example: A prime holdings company selling of all its companies.

11. Liquidation
This involves selling all of a company's asset, in parts, or as a whole, for their
tangible worth.
Example: A prime holding company selling all its companies.
The Strategic Marketing Process
The strategic marketing process seeks to establish a clear and
concerned direction for all marketing activities of an organization. It
includes plan to reach specific goals/objective.

Step 5: Strategy evaluation and control.

After the strategy is developed, periodic, monitoring and
evaluation are needed. This is necessary to identify deviations
and make necessary adjustments and corrections.
WHAT IS TACTICAL
MARKETING?
Tactical marketing- refers to the actions a company undertake in order
to execute an organization's strategy. It 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: product, price promotion
place, people, process, and physical evidence.
Tactical Marketing Process

Complementing the strategic marketing process, the tactical

marketing process determines the means or tactics to implement
the strategies. It involves the identification of specific activities,
timetables, responsibilities, and budgets and their
implementations. The objective is to ensure that the strategies
are implemented successfully .
The Tactical Marketing Process

The strategic marketing process seeks to establish a clear and concerned direction for all
marketing activities of an organization. It includes plan to reach specific goals/objectives.

Figure 2: Diagram of Tactical Marketing Process

Marketing Activity
Marketing Action Timetables
Strategies Plan/Tactics Activities

Responsibi
Monitoring Activity lity
and Control Budgets Accontabili
ty
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: product, price
promotion place, people, process, and physical evidence
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. An action plan is a sequential series of marketing
activities.

2. Name the necessary resources and monitor the allocated

budget.
Get quotations for all elements of the proposal tactics and make a
detailed budget plan. Make sure that the budget can support the
tactics because marketing costs can increase quickly. Also, assign a
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. This will help in implementing changes or
improvements on the tactics. For example, one of the tactics of a start-
Example of an item in an action plan.

Action Time Frame Team Requiremen

Member ts
Post regular March 1-30, Asiana Post at least
updates 2021 (30 days twice a week.
about the before the Aside from
product launching) the
launching on company’s
the own content,
company’s share also a
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about the
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Applying Strategic Marketing and
Tactical Marketing
Strategic marketing will always come first because it shows where the
company wants to go in terms of growth and relation to its
competitors. Tactical marketing consists of the activities needed to
implement the strategies. In short, strategic marketing is the idea and
tactical marketing is the action.

Example:
Strategic Marketing: To increase global presence, the company
formed long-term partnership with international companies for
sponsorships.

Tactical Marketing: The company participated in different sports

tournament with partners where exposed to a global audience.

Strategic Marketing: Another marketing strategy is the creation of

the Brand ID platform which caters to international market.

Tactical Marketing: Creation and delivery of customized products

 THANK YOU FOR
LISTENING!

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