MANAGINGMANAGINGTHE MARKETINGTHE MARKETING

FUNCTIONFUNCTION

Prepared by:Prepared by:SHERWIN A. ESPIRITUSHERWIN A. ESPIRITU

BSME V-ABSME V-A

CONTENTS:CONTENTS: What is the Marketing Concept?What is the Marketing Concept? The Engineer and the Four P’s 0f The Engineer and the Four P’s 0f

MarketingMarketing The ProductThe Product The PriceThe Price The PlaceThe Place The PromotionThe Promotion

Strategic Marketing for EngineersStrategic Marketing for Engineers Selecting a Target MarketSelecting a Target Market Developing a Marketing MixDeveloping a Marketing Mix

Engineering managers are engaged in Engineering managers are engaged in the production of tangible or intangible the production of tangible or intangible goods.goods.

Some of these engineer managers are Some of these engineer managers are directly responsible for marketing the directly responsible for marketing the company‘s products or services.company‘s products or services.

If he is promoted as general manager, If he is promoted as general manager, both the production and marketing both the production and marketing

At whatever management the level the At whatever management the level the engineer manager works, he must be engineer manager works, he must be convincing others to patronize his convincing others to patronize his outputs.outputs.

WHAT IS THEWHAT IS THEMARKETING MARKETING CONCEPT?CONCEPT?

Marketing is a group of activities Marketing is a group of activities designed to facilitate and expedite the designed to facilitate and expedite the selling of goods and services.selling of goods and services.

The marketing concept states that the The marketing concept states that the engineer must try to satisfy the needs engineer must try to satisfy the needs of his clients by means of a set of of his clients by means of a set of coordinated activitiescoordinated activities

When clients are satisfied with what When clients are satisfied with what the company offers, they continually the company offers, they continually provide business.provide business.

THE ENGINEER THE ENGINEER AND THE FOUR P‘S AND THE FOUR P‘S

OF MARKETINGOF MARKETING

The engineering organization will be The engineering organization will be able to meet the requirements of its able to meet the requirements of its clients (or customers) depending on how clients (or customers) depending on how it uses four P‘s of marketing which are it uses four P‘s of marketing which are follows:follows:

1.1. the product (or service)the product (or service)

2.2. the pricethe price

3.3. the place, andthe place, and

4.4. the promotion.the promotion.

The ProductThe Product In the marketing sense, the term In the marketing sense, the term

“product” includes the tangible (or “product” includes the tangible (or intangible) item and its capacity to intangible) item and its capacity to satisfy its specific need.satisfy its specific need.

The services provided by the engineer The services provided by the engineer manager will be evaluated by the manager will be evaluated by the client on the basis whether or not his client on the basis whether or not his or her exact needs are met.or her exact needs are met.

When a competitor comes into the When a competitor comes into the picture abd sells the same type of picture abd sells the same type of service, the pressure to improve the service, the pressure to improve the quality of services sold will felt.quality of services sold will felt.

When the improvement is not possible, When the improvement is not possible, “extras” or “bonuses” are given to “extras” or “bonuses” are given to clients.clients.

An example is the construction An example is the construction company that provides “free company that provides “free estimates” on whatever inquiries on estimates” on whatever inquiries on construction are received.construction are received.

The PriceThe Price Price refers to “the money or other Price refers to “the money or other

considerations exchanged for the considerations exchanged for the purchase or use of the product, idea, purchase or use of the product, idea, or service”.or service”.

Some companies use price as a Some companies use price as a competitive tool or as means to competitive tool or as means to convince the customer to buy.convince the customer to buy.

When products are similar in quality or When products are similar in quality or other characteristics, price will be other characteristics, price will be strong factor on whether or not a sale strong factor on whether or not a sale will be made . will be made .

The Engineering Manager and the The Engineering Manager and the Four P‘s of MarketingFour P‘s of Marketing

OBJECTIVES VEHICLE RESULTOBJECTIVES VEHICLE RESULT

The MarketingObjectivesof the Engineer Manager

ProductPricePlacePromotion

Successor

Failure

When a type of service becomes When a type of service becomes standardized, price can be strong standardized, price can be strong competitive tool. When a construction competitive tool. When a construction firm, for instance, charges a flat 10 firm, for instance, charges a flat 10 percent service fee for all of its percent service fee for all of its construction services, a competitor construction services, a competitor may charge a lower rate. Such action, may charge a lower rate. Such action, however, will be subject to whether or however, will be subject to whether or not the industry will allow such not the industry will allow such practice.practice.

The PlaceThe Place If every factor is equal, customers would If every factor is equal, customers would

prefer to buy from firms easily accessible prefer to buy from firms easily accessible to them. If time is of the essence, the to them. If time is of the essence, the nearest firm will be patronized.nearest firm will be patronized.

It is very important for companies to It is very important for companies to locate in places where they can be easily locate in places where they can be easily reached by their customers. Not every reached by their customers. Not every place is the right location for any place is the right location for any company.company.

When a company cannot be near by the When a company cannot be near by the customers, it uses other means to customers, it uses other means to eliminate or minimize the effects of the eliminate or minimize the effects of the problem.problem.

Some of these problems are:Some of these problems are:

1.1. hiring sales agent to cover specific hiring sales agent to cover specific areas;areas;

2.2. selling to dealers in particular areas;selling to dealers in particular areas;

3.3. establishing branches where establishing branches where customers are located;customers are located;

4.4. establishing franchises in selected establishing franchises in selected areas. areas.

Manufacturing companies can choose or Manufacturing companies can choose or adapt all of the above-mentioned options.adapt all of the above-mentioned options.

Service companies like construction firms Service companies like construction firms adapt the modified versions.adapt the modified versions.

An example is the engineer manager of a An example is the engineer manager of a construction firm who gives commissions construction firm who gives commissions to whoever could negotiate a construction to whoever could negotiate a construction contract for the firm. contract for the firm.

The PromotionThe Promotion When engineer managers have products When engineer managers have products

or services to sell, they will have to or services to sell, they will have to convince buyers to buy from them.convince buyers to buy from them.

Before the buyer makes the purchasing Before the buyer makes the purchasing decision, however, he must first be decision, however, he must first be informed, persuaded and influenced.informed, persuaded and influenced.

The activity referred to, in this case as The activity referred to, in this case as promotionpromotion..

McCarthy and Perreault define promotion McCarthy and Perreault define promotion as “communicating information between as “communicating information between seller and potential buyer to influence seller and potential buyer to influence attitude and behavior.”attitude and behavior.”

There are promotional tools available There are promotional tools available and the engineer manager must be and the engineer manager must be familiar with them if he wants to use familiar with them if he wants to use them effectively. These tools are as them effectively. These tools are as follows:follows:

1.1. advertisingadvertising

2.2. publicitypublicity

3.3. personal sellingpersonal selling

4.4. sales promotionsales promotion

AdvertisingAdvertising Nylen defines advertising as “a paid Nylen defines advertising as “a paid

message that appears in the mass message that appears in the mass media for the purpose of informing or media for the purpose of informing or persuading people about particular persuading people about particular products, services, beliefs, or action.products, services, beliefs, or action.

The mass media referred to include The mass media referred to include television, radio, magazines, ana television, radio, magazines, ana newspapers.newspapers.

If the engineering manager wants to If the engineering manager wants to reach a large number of people, he may reach a large number of people, he may use any of the mass media depending use any of the mass media depending on the specific needs and his budget.on the specific needs and his budget.

An Example of an Advertising An Example of an Advertising MessageMessage

ALECTO GENERAL TECHNOLOGYALECTO GENERAL TECHNOLOGYANDAND

DEVELOPMENT CORPORATIONDEVELOPMENT CORPORATION

ENGINEERS • DESIGNERS •CONTRACTORS• SUPPLIERENGINEERS • DESIGNERS •CONTRACTORS• SUPPLIER

Computer FacilitiesComputer FacilitiesDesign and InstallationDesign and Installation

Local Area Networking-CablingLocal Area Networking-CablingData and Communication and Data and Communication and

Telecommunication WorksTelecommunication Works

Electrical WiringElectrical Wiring

Mechanical and Civil WorksMechanical and Civil Works

Fiber Optic Cabling Installation and Fiber Optic Cabling Installation and TerminationTermination

Supplier of UTP Fiber Optic and Coaxial CableSupplier of UTP Fiber Optic and Coaxial Cable

1495 D. Oliman St., Makati City1495 D. Oliman St., Makati CityTels. 890-2571, 890-2492Tels. 890-2571, 890-2492 890-3604, 890-3607890-3604, 890-3607Fax No. 890-2978Fax No. 890-2978

FiFi

PublicityPublicity The promotional tool that publishes news The promotional tool that publishes news

or information about a product, service or information about a product, service or idea on behalf of a sponsor but is not or idea on behalf of a sponsor but is not paid for by the sponsor is so called paid for by the sponsor is so called publicity.publicity.

The mass media is also the means used The mass media is also the means used for publicity.for publicity.

If the engineer manager knows how to If the engineer manager knows how to use it , publicity is very useful use it , publicity is very useful promotional tool.promotional tool.

His message maybe presented as a news His message maybe presented as a news item, helpful information, or an item, helpful information, or an announcement.announcement.

An Example of a Publicity An Example of a Publicity ReleaseRelease

NOKIA PRESENTS THE FIRST PHONE DESIGNEDNOKIA PRESENTS THE FIRST PHONE DESIGNED

FOR LOCAL NEEDSFOR LOCAL NEEDS

Manila, July 1, 1997 – Nokia Mobile Phones, the Manila, July 1, 1997 – Nokia Mobile Phones, the largest European and worldlargest European and world‘s largest manufacturer of mobile ‘s largest manufacturer of mobile phones and a world leader in digital technology, has phones and a world leader in digital technology, has introduced to the Philippines the Nokia 3810 “Big Face”, the introduced to the Philippines the Nokia 3810 “Big Face”, the first mobile phone designed specifically for the needs of the first mobile phone designed specifically for the needs of the Asia-Pacific cellular market.Asia-Pacific cellular market.

The Nokia 3810 is a product of extensive regional The Nokia 3810 is a product of extensive regional research and feedback. Tagged as Nokia “Big Face”, the research and feedback. Tagged as Nokia “Big Face”, the 3810 has a larger screen contained in a small and sleek 3810 has a larger screen contained in a small and sleek European styled body, making it easier to read messages. European styled body, making it easier to read messages. With its unique graphic display, the Nokia 3810 displays With its unique graphic display, the Nokia 3810 displays large or small text, it is easier to find what you are looking large or small text, it is easier to find what you are looking for.for.

Moreover, Nokia 3810 provides a comprehensive Moreover, Nokia 3810 provides a comprehensive range of features like call management, memory functions, range of features like call management, memory functions, short message services, security code/control and has the short message services, security code/control and has the most complete range of accessories.most complete range of accessories.

Nokia Mobile Phones is a part of the Nokia Group, a Nokia Mobile Phones is a part of the Nokia Group, a global telecommunications company headquarters in global telecommunications company headquarters in Helsinki, Finland. Nokia employs nearly 34,000 people in 45 Helsinki, Finland. Nokia employs nearly 34,000 people in 45 countries and has netcountries and has net

sales of US$8.5 billion in 1996. Nokia can be visited on the sales of US$8.5 billion in 1996. Nokia can be visited on the world wide web http:/www.nokia.com. world wide web http:/www.nokia.com.

Personal SellingPersonal Selling A more aggressive means of promoting A more aggressive means of promoting

the sales of a product or service is called the sales of a product or service is called personal selling.personal selling.

It refers to the “oral presentation in a It refers to the “oral presentation in a conversation with one or more conversation with one or more prospective purchasers for the purpose of prospective purchasers for the purpose of making the sale”.making the sale”.

Personal selling may be useful to the Personal selling may be useful to the marketing efforts of the engineer marketing efforts of the engineer manager. If, for instance, he is the manager. If, for instance, he is the general manager of a firm manufacturing general manager of a firm manufacturing spare parts, he may assign some spare parts, he may assign some employees to personally seek out spare employees to personally seek out spare parts dealers and big trucking companies parts dealers and big trucking companies to carry their product lines. to carry their product lines.

Sales PromotionSales Promotion Any paid attempt to communicate with Any paid attempt to communicate with

the customers other than advertising, the customers other than advertising, publicity, and personal selling, may be publicity, and personal selling, may be considered as promotion.considered as promotion.

This includes displays, contests, This includes displays, contests, sweepstakes, coupons, trading stamps, sweepstakes, coupons, trading stamps, prizes, samples, demonstration, prizes, samples, demonstration, referral gifts etc.referral gifts etc.

Contest and sweepstakes are very Contest and sweepstakes are very popular sales promotion tools. popular sales promotion tools.

STRATEGIC STRATEGIC MARKETINGMARKETING

FOR ENGINEERS FOR ENGINEERS

Companies, including those managed by Companies, including those managed by engineer managers, must serve markets engineer managers, must serve markets that are best fitted to their capabilities. that are best fitted to their capabilities. To achieve this end, a very important To achieve this end, a very important activity called strategic marketing is activity called strategic marketing is undertaken. undertaken.

Under thus set-up, the following steps Under thus set-up, the following steps are made: are made:

1.1. Selecting a target marketSelecting a target market

2.2. Developing a marketing mix.Developing a marketing mix.

Selecting a Target MarketSelecting a Target Market

A market consists of individuals or A market consists of individuals or organizations, or both, with the desire organizations, or both, with the desire and ability to buy a specific product or and ability to buy a specific product or service.service.

To maximize sales and profits, a To maximize sales and profits, a company has the option of serving company has the option of serving entirely or just a portion of its chosen entirely or just a portion of its chosen market.market.

Within markets are segments with Within markets are segments with common need and which will respond common need and which will respond similarly to a marketing action.similarly to a marketing action.

The Construction Market and Its SegmentThe Construction Market and Its Segment

THE CONSTRUCTIONMARKET

ResidentialSegment

IndustrialSegment

GovernmentSegment

actualconstructionsub-segment

actualconstructionsub-segment

constructionmaterials

sub-segment

constructionmaterials

sub-segment

actualconstructionsub-segment

actualconstructionsub-segment

An analysis of the various segments of the An analysis of the various segments of the chosen market will help the company chosen market will help the company make a decision on whether to serve all or make a decision on whether to serve all or some of the segments. The segment or some of the segments. The segment or segments chosen become the target segments chosen become the target market.market.

In selecting a target market, the following In selecting a target market, the following steps are necessary:steps are necessary:

1.1. Divide the total markets into groups of Divide the total markets into groups of people who have relatively similar product people who have relatively similar product or service needs.or service needs.

2.2. Determine the profit potentials of each Determine the profit potentials of each segment.segment.

3.3. Make a decision on which segment or Make a decision on which segment or segments will be served by the company. segments will be served by the company.

Factors Used in Selecting Target Factors Used in Selecting Target MarketMarket

A target market must have the A target market must have the ability to satisfy the profit ability to satisfy the profit objectives of the company.objectives of the company.

In selecting a target market, the In selecting a target market, the following factors must be taken into following factors must be taken into consideration:consideration:

1.1. The size of the market, andThe size of the market, and2.2. The numbers of the competitors The numbers of the competitors

serving the market.serving the market.

Developing a Marketing MixDeveloping a Marketing Mix

After a target market have been After a target market have been identified, a marketing mix must be identified, a marketing mix must be created and maintained. The created and maintained. The marketing mix consists of fou marketing mix consists of fou variables:variables:

1.1. productproduct

2.2. priceprice

3.3. promotion promotion

4.4. placeplace

Given a marketing environment, the Given a marketing environment, the engineer manager can manipulate any engineer manager can manipulate any or all variables to achieve the or all variables to achieve the companycompany‘s goals.‘s goals.

The quality of the product may be The quality of the product may be enhanced, or the selling price made enhanced, or the selling price made a little lower, or the promotion a little lower, or the promotion activity made a little more activity made a little more aggressive, or a wider distribution aggressive, or a wider distribution area may be covered. Any of all the area may be covered. Any of all the foregoing may be undertaken as foregoing may be undertaken as conditions warrant.conditions warrant.

Total Demand and Net Demand as a Total Demand and Net Demand as a Guide for Determining Target MarketGuide for Determining Target Market

Telephone Lines in Cabanatuan CityTelephone Lines in Cabanatuan City

Demand and Supply SituationDemand and Supply Situation

19971997

Total DemandTotal Demand 150,000 lines150,000 lines

SupplySupply

Company ACompany A 50,000 lines50,000 lines

Company BCompany B 30,000 lines30,000 lines

Company CCompany C 10,000 lines10,000 lines

Total SupplyTotal Supply 90,000 lines90,000 lines

NET UNSATISFIED DEMANDNET UNSATISFIED DEMAND 60,000 lines60,000 lines

The Company, The Marketing MixThe Company, The Marketing Mixand Target Marketand Target Market

ProductPricePromotionPlace

THETARGET MARKET

Othermarkets

Othermarkets

Othermarkets