Marketing Principles Essay

1.1 Explain the various elements of the marketing process.

Marketing is the activity, set of institutions, and processes for creating, communicating, delivering and exchanging offers that have value for customer, clients, partners and society at large. (Williams, 2013)

Marketing Process:

Situation analysis focuses more on the possible opportunities that will satisfy a customer’s need. This depends on how the product can influence the a specific environment and how the product can control you a specific group you want to target. It is being familiar with the SWOT forces.

Marketing strategies is a process that specifies the information of the market to obtain its effectiveness.  Segmentation involves dividing the market into groups, where individuals have similar needs and wants for services and products. It could also be a segmentation of people on the basis of behavior, culture and economic status. (Rajeev, 2012)

Targeting also known as the target market is the potential consumers of a product/service. Targeting helps tap the subset of the customer population most likely to purchase and use the product to effectively achieve maximum sales and profits.

(Johnson, 2012)

Positioning is how you want to be perceived in the minds of prospects versus your competition. It is also creating a positive image in the minds of the target market.

Value Proposition pertains on how you want your consumers distinguish you from your competitors and make it obvious you are the best available choice. This marketing strategy summarizes what makes your product/service unique as it relates to addressing specific customer decision making criteria. It must be all about what’s important to them – your prospects. (Core Marketing Strategies, 2013)

Market mix decision is a general phrase used to describe the different kinds of choices organizations have to make in the whole process of bringing a product or service to market. The 4 Ps is the best known way of defining marketing mix: (P.1) Product refers to any services or conveniences that are part of the offering. (P.2) Pricing should take into account profit margins and the probable pricing response of competitors. (P-3) Place is associated with channels of distribution that serve as the means for getting the product to the target consumers. (P-4) Promotions are those related to communicating and selling to the potential consumers. This includes advertising, public relations, media types, etc. (Internet Center for Management and Business Administration, Inc., 1999-2010)

1.2 Evaluate the benefits and costs of marketing orientation for a selected organization.

Jollibee is our chosen food organization. It is the largest fast food chain in the Philippines, operating a nationwide network of over 750 stores. It is a dominant market leader in the Philippines.

It is a family oriented work environment, the brand’s values also reflect on their advertising and marketing. Jollibee knows their target audience very well: the traditional family and all communication materials focus on the importance of family values.

Jollibee is so well-loved every time a new store opens, especially overseas. It is a stronghold of heritage and monument of Filipino pride. (Jollibee Foods Corporation, 2013)

The primary target market of Jollibee are Filipino kids ages 3-10y/o, teens ranging 11-21y/o can either be male or female; Filipino families even the senior citizen. Social classes C, D and E; and those looking for budget-friendly quick meals.

In comparison from Maslow’s hierarchy of needs, eating in a fast-food chain w/o asking for money makes an individual happy, falls under self-actualization needs. Eating in Jollibee with family and friends makes people feel loved and accepted. That is a social need or feeling the sense of belongingness and love. Lastly, the need to satisfy ones hunger and in order to survive, it is the physiological need on an individual.

The target market prefers Jollibee because the food are unique and has an appealing taste, foods can be easily served, foods are affordable, there a lots of variants the people can choose from, the mileau is very homey, the customer service is very family-oriented, and families, friends and colleagues can enjoy this together.

Being the pioneer in fast-food industry, Jollibee had the majority in the marketing opportunity. Jollibee was able to capture 65% of the market share in hamburger market in the Philippines. The JFC reported 82 billion pesos by the end of 2011. Based on the annual report of JFC, Jollibee earned 50 billion pesos revenue on 2011. (Esberto, 2012)

The product offered by Jollibee appeals to the Filipinos taste for spicy burgers. By concentrating its resources on satisfying the Filipino palate, Jollibee has been able to serve localized dishes that are unlikely found in other fast-food chains in the Philippines. In addition to that, offering the usual French fries that accompany the meals found in McDonald’s, KFC, Burger King and so forth.

Jollibee also serves rice or spaghetti, Filipino style Even the burgers are cooked exactly as Filipinos want them done- sweeter and with more seasonings, often likened to what a Filipino mother would cook at home. It even incorporated recipes from employees to truly capture local tastes.

The company’s phenomenal growth owes much to its strict and committed adherence to high standards as symbolized by “F.S.C”: Food (F) served to the public must meet the company’s excellence standards or it will not be served at all; the Service (S) must be fast and courteous; and Cleanliness ©, from kitchen to utensils, must always be maintained.

As for pricing, it is closely related to customer satisfaction. Thus, JFC provides its high quality fast-food products at a relatively cheaper price. According to its commitment to serve each and every Filipino, Jollibee keeps things affordable at all. The “DLSU SSURVEY” shows that, 94% of Jollibee’s customers think it’s affordable or cheaper.

Figure [ 1 ]: Benefit Positioning vs. Brand Matrix

The location of outlet is of key importance to the marketing strategy of Jollibee. It has established a large number of outlets to state that they care about the accessibility of fast-food outlet and 72% is satisfied that Jollibee maintained it very well. Overseas, the outlet in Hong Kong is located at Central where a large number of Filipinos gather. It is an example of Jollibee’s good placing strategy.

Recently, to capture more share from their customer’s wallet, Jollibee introduced home service. Loyal customers, for some reason who can’t get out of home but want to have a bite of Jollibee, can now avail their products via phone call. They also provide drive-thru’s for their customers who are in a rush and can’t get out of their car and line-up.

Jollibee management carefully selects their franchisors to make sure they can meet its standard. To be a franchisee of Jollibee, one has to invest 15-30 million pesos.

Brands in local market are strong contenders and not to be underestimated. Jollibee often have the advantage of intimate knowledge of consumer tastes and consumer preference through local pride. Jollibee used the wave of nationalist pride to promote a Filipino brand of hamburger. This strategy met with great success.

Investing in socio-civic programs designed to serve its host communities further secured Jollibee’s position as a Filipino company for the Filipinos. Advocacy campaigns such as the early Christmas drive “ma-Aga ang pasko sa Jollibee”, again endorsed by Aga Muhlach, the poverty housing project with habitat.

For humanity, the “Kaya Mo Yan Kid Campaign”, it encourages kids to show their potentials that will contribute to the company’s overall success, not only with its customers but with all its stakeholders.

Family is a key component for Jollibee’s promotion. They just simply don’t want to cater food and service but they wanted to be a part of every Filipino family. Its quality customer service of being family-oriented is one key to their success. While McDonald’s promotion focuses on the empowerment of young adults to enjoy life by means of eating their products.

Jollibee’s rapid growth is due to its superior menu line-up, creative marketing programs, and efficient manufacturing and logistics facilities. It is made possible by well-trained teams that work in a culture of integrity and humility, fun and family-like environment.

As a corporate citizen, Jollibee is also committed to give back to its host communities through meaningful and lasting socio-civic projects. (Sakib, 2011)

Jollibee was able to attain a competitive advantage in the Philippines over McDonald’s by doing following things: Jollibee was the first to enter the market. It was able to retain tight control over operations management, which allowed it to price below its competitor. And, it had the flexibility to cater to the tastes of its local consumers.

From the very beginning Jollibee Foods Corporation had focused on delivering quality food and service at an affordable cost to the customers. This had been possible only due to excellent operational control. Jollibee enjoyed a dominant position in the fast food market in Philippines until McDonalds entered the market. They focused on their main asset, their knowledge of taste and preferences of the local population. [ (Andrew, 2011) ]

2.1 Show macro and micro environmental factors which influence marketing decisions.

The marketing environment consists of all the actors and forces outside marketing that affect the marketing management’s ability to develop and maintain successful relationships with its target customers. Though these factors and forces may vary depending on the specific company and industrial group, they can generally be divided into broad micro environmental and macro environmental components.

Micro environmental components are:

Company-top management is responsible for setting the company’s mission, objectives, broad strategies, and policies. Marketing managers must make decisions within the parameters established by top management. Marketing managers must also work closely with other company departments. Areas such as finance, R & D, purchasing, manufacturing, and accounting all produce better results when aligned by common objectives and goals. All departments must “think consumer” if the firm is to be successful. The goal is to provide superior customer value and satisfaction.

Suppliers-are firms and individuals that provide the resources needed by the company and its competitors to produce goods and services. They are an important link in the company’s overall customer “value delivery system.”

Marketing channel firms (intermediaries)-firms that help the company to promote, sell, and distribute its goods to final buyer.

Customer markets-consumer markets, individuals and households that buy goods and services for personal consumption. Business markets, those who buy goods and services for further processing or for use in their production process. Reseller markets, those who buy goods and services in order to resell them at a profit. Government markets, agencies that buy goods and services in order to produce public services or transfer them to those that need them. International markets, buyers of all types in foreign countries

Competitors-A company must secure a strategic advantage over competitors by positioning their offerings to be successful in the marketplace. No single competitive strategy is best for all company.

Publics – Any group that has an actual or potential interest in or impact on an organization’s ability to achieve its objectives. A company should prepare a marketing plan for all of their major publics as well as their customer markets.

Macro environmental components are thought to be:

Demographic-the study of human populations in terms of size, density, location, age, sex, race occupation, and other statistics. It is of major interest to marketers because it involves people and people make up markets. Demographic trends are constantly changing

Economic-those factors that affect consumer purchasing power and spending patterns.

Natural-natural resources that are needed as inputs by marketers or that are affected by marketing activities

Technological-forces that create new technologies, creating new product and market opportunities

Political-laws, government agencies, and pressure groups that influence and limit various organizations and individuals in a given society. Various forms of legislation regulate business

Cultural forces-institutions and other forces that affect society’s basic values, perceptions, preferences, and behaviors. Certain cultural characteristics can affect marketing decision-making

The wise marketing manager knows that he or she cannot always affect environmental forces. However, smart managers can take a proactive, rather than reactive, approach to the marketing environment. (Kotler, 2012)

2.2 Propose segmentation criteria to be used for products in different markets.

To ensure that the market segments that have been constructed by the firm, they must meet the basic requirements and guidelines, which will make them usable segments and potential target markets. (Market Segmentation Study Guide, 2012)

An ideal market segment meets all of the following criteria: (1) It is possible to measure, (2) it must be large enough to earn profit, (3) it must be stable enough that it does not vanish after some time, (4) it is possible to reach potential customers via the organization’s promotion and distribution channel, (5) it is internally homogeneous (potential customers in the same segment prefer the same product qualities, (6) it is externally heterogeneous, that is, potential customers from different segments have different quality preferences, (7) it responds consistently to a given market stimulus, (8) it can be reached by market intervention in a cost-effective manner and (9) it is useful in deciding on the marketing mix. (Wikipedia, The Free Encyclopedia, 2013)

2.3 Choose a targeting strategy for a selected product or service.

Kitchner had the goal of making Jollibee one of the world’s top ten fast food brands by the year 2000. In his plan to increase international expansion, he implemented two strategies, “targeting expats” and “planting the flag”. His plan of “targeting expats” allows the company transition into an unfamiliar market much easier because expatriate Filipinos working in other countries could relate to Jollibee’s. Though there is a huge risk of targeting a narrow segment, Jollibee’s local success allows for momentum to generate the expansion and growth of the company. However, Kitchner quickly found out that this market was limited and that not all the overseas Filipinos were potential customers. (Paul, 2011)

On the other hand, Kitchner’s decision to “plant the flag” is to leverage Jollibee’s competitive advantage by entering new geographic market, his rapid expansion strategy was unfocused and poorly executed. He also neglected to consider the large transaction costs associated with establishing markets in new countries. Kitchner’s desire to be first-mover in a number of small, undeveloped markets would not have brought the prestige needed to win the firm better partners. “Planting the flag” only showed that Jollibee knew how to repeat its success. In order to compete on the level with multinationals, Jollibee would have to take its performance to the next step and prove that it could continue to build its competitive advantage. (Tran, 2005)

2.4 Demonstrate how buyer behavior affects marketing activities in different buying situations.

Buying behavior is made up of the internal and external factors that explain why consumers buy and use certain products or services. This type of behavior can affect the marketing strategy that a business employs to promote its products, and when this behavior is analyzed, it can guide a business toward better marketing strategies and methods that it might not have originally used.

Supply and Demand is one of the basic economic theories that drive marketing of which consists of a ratio between the amounts of supply versus the amount of demand for that supply. Two supply and demand situations can majorly affect the type of marketing you employ for your goods. These situations include when a product or service is in abundant supply and demand is scarce or when a product or service is scarce and there is increased demand for it.

Routine buying behavior is the programmed response that consumers may have to certain types of products. Usually these products are not expensive, such as cars or computers, and can include anything that is commonly bought on a week-to-week basis.

Complex Decision-Making is another type of buyer behavior which is usually associated with high-end, expensive or scarce products such as diamonds, fine wine or automobiles. This behavior often comes with high involvement on the consumer’s part in that he will generally want to thoroughly research the product and differences between brands before he makes a decision on which one to buy.

Internal Factors that marketers need to be aware of can also affect a consumer’s buying process. These elements — personal, psychological and social — guide buying behaviors and consumption patterns and can be a valuable tool to creating better marketing strategies on the seller’s side. For example, a consumer may opt for a specific brand of cola because of provocative advertising that may make that consumer feel “sexy” for drinking it, versus buying another brand of cola that uses nonsexual advertising. Delivering the feeling you want experienced when a consumer uses your product is imperative to a good marketing mix of strategies. (Vogt, 1999-2013)

2.5 Positioning selected product/service.

Ensuring high traffic needs an emphasis on store location and positioning Jollibee in the minds of the consumers as a place where they can enjoy eating fast food. This entails proper branding and positioning of the services/products offered.

Jollibee Foods Corporation brought to everyone’s lips the promise of LANGHAP SARAP (smells so good so it must taste good)

Jollibee also projected itself as a world-class brand by expanding its market overseas. Its nationalist view is a key fact. Personnel at Jollibee communicate with customers in local language rather than English unlike to its competitor such as McDonald’s.

It provides more homely environment than competitors with tailored food menu to meet the local people’s needs. Jollibee is a super place for children that has ever been. Children can come with their parents and play here while being served with special items made for them. Also, Jollibee facilitates party arrangements for its consumers.

Thus, the value proposition of Jollibee that distinguished it from its competitors is, “Jollibee provide special Philippines’ meal at a cheaper price in a very much homely environment and is a place where people come for joy”. (Sakib, 2011)

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