Marketing Mix

Chapter Six
 What is Marketing Mix?
• It is a widely accepted strategic marketing
tool that combines the original 4Ps with the
additional 3Ps in formulating marketing
tactics for a product or service.
• Under the Marketing Mix are the 7Ps of
marketing, which are the product, place,
price, promotion, people, packaging, and
process.
7Ps
• It is about finding the right combination that will mostly
effectively serve the customers needs and wants at the same
time achieve the profitability objective.
• 4 Ps (originals)
- were used in marketing products or physical goods only,
however these are not applicable to marketing services.
• 3 Ps (additional)
- Also applicable in marketing products were introduced
• The 7Ps model is use to the following:
- conduct a situation analysis to set objectives
- conduct a strength, weaknesses, opportunity and threat
(SWOT) or competitive analysis.
 - to come up with marketing strategies and tactics.
• A challenge to a potential entrepreneur is to ask the
following key questions onset:
➢Product
- What location is best suited for the business?
- Where are the places that has more potential
customers?
- Can they conveniently transact on-site or online?
- How is the process of distribution of products or
performance of service?
➢Price
- What is the most appropriate price?
- What pricing strategies will be used for the target
customers?
➢Promotion
- What is the most effective advertisement or combination of
advertisement?
- Which advertising tool should be used to drive awareness
and increase sales?
➢People
- What type of people to be hired?
- What are the basic skills needed for the job?
- What leadership style will be applied by the entrepreneur?
➢Packaging
- What is the best packaging for the product that is attractive
enough to customers and co-efficient at the same time?
- What physical evidence does the entrepreneur need to set
up so as to sell services?
➢Processing
- What is the most compelling feature of
the product or the business that will make
difference in the lives of the customers?
- What sets the product or service from
the rest?
7Ps
 Product
• A product is any physical good, service, or idea
that is created by an entrepreneur or an
innovator in serving the needs of the
customers and addressing their existing
problems.
• The product or service should not be created
before finding the right customers, because
this is very risky and resources and time might
be put to waste.
Place
• Refers to a location or the medium of the
transaction.
• Place also covers the product distribution and
the whole business logistics.
• Major objectives of PLACE:
- for place is to provide customers with pleasant
experience in buying the product or availing of
the service so that they will keep on coming
back whether on-site or online.
- the place should be (whether on-site or online)
presentable, appealing and catchy.
• The three-level concept of products or services
summarizes the reasons that a customer decides to buy a
product or avail of a service.
Level 1: Core benefits of the Product or Service
- The core benefits of a product or service are the major
factors why a customers buys a product or avails of a
service.
Level 2: Physical characteristics of the product or Service
- once the core benefits has been satisfied and options
are available to the customers, the tendency is to look for
the second layer of section.
Level 3: Augment Benefits of a Product or Service
- Augment benefits are only additional benefits; a
customer will still get the core benefits of a product or
service even without the augment benefits. However, in
case of common products and services where there are
number of competitors, the differentiator comes from the
physical characteristics or physical evidence, the
customers experience, or the augmented benefits.
• Criteria for choosing the right
location:
- suitability to the target market
- condition of the neighborhood
- potential of the area for future
developments, laws and regulations
in the area.
- direct and indirect competitors
- foot traffic
- cost of doing business
 Price
• Price is the peso value that the entrepreneur assigns to
certain product or service after considering its cost,
competition, objectives, positioning, and target market. It
is the only P in the 7Ps that generates profit for the
business.
The entrepreneur must follow these general pricing
guidelines to make the business sustainable and
thriving:
1. Do not price the product or service below its cost.
2. Monitor competitors’ prices, and ensure that your
prices are at par with them unless the product or
service is really way superior to the competitors.
3. Align prices strategies that are relevant to your
market segment.
4. Align prices with your business objectives.
The profit of an entrepreneur can be determined only
if there is proper computation of cost associated with
the product or service. There are two classifications of
cost.
1. Variable cost or controllable costs – this cost are
directly proportional to the number of products
manufactured or to the number of services performed.
2. Fixed cost or uncontrollable costs – These are costs
not directly proportional to the manufacturing of the
product or to the performance of the service.
 Promotion
• Involves presenting the products or services to
the public and how these can address the
public needs, wants, problems, or desires.
• These are the four marketing messages for
promotion:
1. Value proposition or unique selling
proposition of the product or service
2. Product or service image
3. Business image
4. Business values and philosophy
 The entrepreneur can choose one
or combination of promotional
tools:
1. advertising
2. selling
3. sales promotion
4. public relation
 People
• In today’s marketing arena, people play a vital
role in servicing customers even though the
entrepreneur sells only physical goods.
• With the arrival of various competing products
and services, one of the major differentiators is
how people or employees make difference in the
lives of the customers.
• When the need arises to hire people, he or she
must identify the specific, necessary job roles of
employees and their descriptions, so they will be
able to know their purpose clearly and serve
customers well.
 Packaging
• Packaging is how the product or service is presented
to customers. It is the overall identification (look and
feel) of the product or service. This will determine the
uniqueness of the product from competitors. This is
the first element that customers see because they
don’t know what’s inside yet.
• Packaging's ultimate goal is to induce customers to
purchase the product or service. Thus, the
entrepreneur should focus on pleasing the
customers’ eyes. It is not just limited on the product
or service alone, but on its totality, including it
accessories, after sales service, and warranty.
 Process
• Process is the last addition in the market mix as
marketers began to realize the importance of
the internal and external operations of the
business to serve customer better.
• Its component include input, throughput, and
output. The internal process includes the back-
office operations (preprocessing, processing,
and post processing) wherein employees or
machines process customers’ request without
necessarily being seen by the customer. The
external process includes the actual servicing
where customers are part of the process.
The End