ENTREPRENEUR

PRODUCT

MARKETING MIX
- Also known as the four P's broad levels of - Refers to what the business offers for sale and
marketing decision namely Product, Price, may include products or services. Product
Place, and Promotion, it is a foundation decisions include the "quality, features,
concept in marketing. benefits, style, design, branding, packaging,
- It is defined as the "set of marketing tools that services, warranties, guarantees, life cycles,
the firm uses to pursue its marketing investments and returns".
objectives in the target market. - A product is anything that can be offered for
- In services marketing, a modified and satisfaction. It may be an idea, a physical
expanded marketing mix is used, typically entity (a good), a service, or any combination
comprising seven P's made up of the original 4 of the three.
P's plus process, people, physical - Product is the bundle of satisfaction, it can be
environment. tangible or intangible which the buyer
receives as the result of a lease or purchase.
ORIGIN OF 4P’s and 7P’s
o The origins of the 4P’s can be traced to the Four Principles of Positioning Strategy (by Jack
late 1940s. The first known mention of a Trout)
mix has been attributed to a Professor of 1. Must establish position for firm or product in
Marketing at Harvard University, Prof. minds of customers
James Culliton. 2. Position should be distinctive, providing one
1. Product simple, consistent message
2. Price 3. Position must set firm/product apart from
3. Place competitors.
4. Promotion 4. Firm cannot be all things to all people-must
focus.
o In 1981, Booms and Bitner proposed a
model of 7P’s, comprising the original 4P’s Uses of Positioning in Creating Competitive
plus process, people and physical evidence, Advantage
as being more applicable for services Tools to Understand Relationships between
marketing. Products and Markets
1. Product 1. Compare to competition on specific attributes.
2. Price
2. Evaluate product's ability to speed consumer
3. Place
needs/expectations.
4. Promotion
3. Predict demand at specific prices/performance
5. Physical Evidence
levels.
6. Process
7. People
Ways to Identify Market Opportunities
1. Introduce new products.
2. Redesign existing products.
3. Eliminate non-performing products.
Product Strategies - The transfer or movement of goods and
1. Breadth Strategy is reaching multiple segments services from manufacturers utilize producer
with a single product. to independent intermediaries to customer
2. Depth Strategy is serving one segment with - This channel resulted by firms who want to
multiple products. expand their markets or end users
3. Tailored Strategy is customizing products for
each segment. Intensity of Channel Coverage
1. Exclusive distribution is the limited number
Positioning (who you are in the marketplace vis-à- of middleman used in a geographic area. It
vis the competition) is also organized in a particular region or
1. Determine who you are in the market provinces to handle the sales and
2. Then decide who you want to be distribution of the product.
3. It involves all of the marketing mix variables
2. Selective distribution is organizing a
moderate number of wholesalers or
PLACE retailers. The entrepreneur uses and tries to
combine some channel controls and image
with good sales volumes and profits.
- the "direct or indirect channels to market,
geographical distribution, territorial coverage, 3. Intensive distribution is organizing a large
retail outlet, market location, catalogues, number of middlemen that are used to
inventory, logistics and order fulfillment". obtain widespread market coverage and
- Place refers either to the physical location channel acceptance.
where a business carries out business or the
distribution channels used to reach markets.
Physical Distribution
- Place may refer to a retail outlet, but
- It covers the broad range of activities in
increasingly refers to virtual stores such as "a
connection with the efficient delivery of raw
mail order catalogue, a telephone call center
materials, parts, semi-finished items, and
or a website.
finished products to designated places and
designated times and in proper conditions.
Channel of Distribution is made up of people or
organizations involved in the distribution process.
It is any activity of firms or individuals who take
part in the flow of goods and services from
manufacturer to final consumer or business user. PRICE

Basic Types of Channel Distribution

 Direct channel distribution - Price determines the value of a good or
- The transfer or movement of goods and service to the buyers even to the sellers. It is
servios Direct channel distributionl user or the amount of money needed in order to
customer without the intervention of acquire a product or service and its
Independent atiddleman. This is the channel accompanying service.
or intermedia, they are independent - Price means the money value of a product or
middleman the entire marketing program. service expressed in terms of peso and or
 Indirect channel distribution centavos.
Five Steps in Developing a Pricing Strategy 3. Price Strategies are ways or some actions to
1.Objective accomplish the goals and objectives of the
a) Sales Based company in gaining profit. Price strategy can be
 The firm is interested in sales growth classified into three different categories.
and/or maximizing market share. The a.) Cost-based price strategy
concern of the company is to increase sales  the firm sets prices by computing
by offering new product design, product merchandise, services and overhead costs
lines, and promotional items then adding the desired profit to those
b) Profit-Based. figures.
 The firm is interested in maximizing profit, b.) Demand-based price strategy
earning a satisfactory profit, optimizing the  The firm sets prices after researching
return on investment or securing an early consumer desires and makes sure the range
recovery of cash. of prices is acceptable to the target market.
c) Status Quo Based. The firms conduct researches regarding the
 The firm seeks to avoid reasonable sale ability of the product.
government actions, minimize the effects of c.) Competition-based price strategy
competitor actions, maintain good channel  The firm sets prices in relation to the
relations, discourage the entry of competitors.
competitors, reduce demands from
suppliers and stabilize prices. 4. Implementing Price Strategy is the firm
 The goal of the company is to maintain readiness to sell the product
good image to the community by creating a.) Customary pricing
projects/ programs that protects its welfare one price is maintained over an extended
and goodwill. period of time. The entrepreneur must
consider the price of the product which is
2. Broad Price Policy provides procedures, rules, affordable to majority of buyers.
and methods to act in one specific situation. It links b.) Variable pricing
prices with the target market, image, and other The price responds to costs fluctuations or
marketing elements. It makes sure that pricing differences in demand. The entrepreneur
decisions are coordinated from other sellers must consider the law of demand and
a.) Penetration pricing supply If there are sufficient supplies and
 uses low prices to capture/attract the few demands, the price will increase and
larger/mass market for a product or service. vice versa.
The preference of the mass majority of the c.) One-price policy is when the price is
market will be the basis of the price set. charged to all customers buying the product
b.) Skimming pricing or service under similar conditions.
 uses high prices to attract the market d.) Flexible pricing is based on customer's
segment more concerned with product ability to negotiate or buy power of the
quality, uniqueness or status than price. To customer. The entrepreneur must meet the
determine who will really patronize the needs and wants of the customer so that
product. they need to adjust the price.
e.) Odd pricing are prices set at levels below
even values. The entrepreneur uses odd
numbers to attract customers in pricing a
product.
 f.) Price-quality association is when the b.) Escalator clauses
consumers believed that high price  the contract which allows price increase
represents high quality and low prices after the sale is concluded before delivery is
represent low quality. made.
g.) Prestige pricing is when customers set price c.) Surcharge
floors and will not buy at prices below those  The supplementary to list prices. These are
floors. Above price ceilings, items would additional charges added to the total price.
seem too expensive. d.
h.) Leader pricing is selling key items at low d.) Mark-ups
prices to gain consumer loyalty within its  happen when the company is raising regular
product line. It is hoped that the customers selling prices because demand is
will buy regularly priced products together unexpectedly high, or costs are rising.
with the specially priced one. e.) Markdowns
i.) Multiple-unit pricing is when the  reductions from original selling prices to
entrepreneur offers discounts to consumers meet lower prices of competitors,
for buying in large quantities. The overstocking, shop-wora merchandise, and
entrepreneur must consider that selling increase customer traffic.
more units will produce more profits. To
prevent overstocking and maintain proper Pricing Strategy
inventory, selling in bulk can increase profit The price set by the firm may be established
and promote growth. through any of the following methods:
j.) Price lining is when instead of setting one 1. Cost-plus pricing
price for a single model of a good or service,
this method covers all costs, variable and fixed,
the firm sells two models of different
plus an extra increment to deliver profit.
quality and features at different prices.
2.Demand pricing
k.) Price bundling is when the firm offers a
this is a method of pricing where the firm sets
basic product, options and customer service
prices based on buyer desires.
for one total price. The entrepreneur will
combine product and service to the price 3.Competitive pricing
set in the product. this method of pricing calls for price-setting on the
l.) Unbundled pricing is when the firm sells by basis of prices charged by competitors.
individual components and allows customer 4.Market pricing
to decide what to buy. this is a form of cost-oriented pricing in which the
m.) Geographic pricing is when the prices are firm sets prices by adding per-unit merchandise
set depending on the distance of the buyer costs, operating expenses, and desired profit.
to the seller.

PROMOTION
5. Price Adjustments, changes in cost, competitive
conditions and consumer demand require changes
in price. Prices can be adjusted in the list prices, - Promotion is any form of communication
escalator clauses, surcharges, mark-ups, which is used to inform, persuade and remind
markdowns, and rebates. people about an organization or individual's
a.) List prices goods, services, image, ideas, community
 regularly quoted prices to customers, as in involvement or impact on the society.
catalogs, price tags and purchase orders.
 - Promotional Mix is a combination of the target customers, company salespeople, or
strategies to accomplish the promotion intermediaries
objectives of an organization. It includes
advertising, publicity, personal selling, and The Selection of a Promotion Mix Depends on
sales promotion that help the organization to Several Variables:
fully inform, persuade, and remind the
customer about the organization goods and 1. Product Life Cycle- An organization must be
services, aware of the different stages of PLC and the
company status to fully design a strategy.
- Promotional Mix Tools refer to the entire set 2. Company Characteristics - The more products
of activities, which communicate the line the company gains the better tools to serve the
products, brand or service to the user. It organization.
raises customer awareness of a product or 3. Relations with Middleman - The dealer such as
brand, generating sales and creating brand retailer or wholesaler can give impact about
loyalty. company effectiveness and efficiency.

These are the following:

1. Advertising PHYSICAL EVIDENCE
a paid, non-personal communication
regarding goods, rervices, organizations,
people, places and ideas that is transmitted - The lasting proof that the service has
through various media by business firms, happened, in terms of buying a physical
government and other non-profit product, the physical evidence is the product
organization and individuals who are in itself.
some way identified in the advertising - According to Booms and Bitner's framework,
message as the sponsor. Advertising is also "physical evidence is the service delivered and
a paid form of communication. any tangible goods that facilitate the
performance and communication of the
2. Publicity is a non-personal communication service.
regarding goods, services, organizations, - Physical evidence is important to customers
people, places and ideas that is transmitted because the tangible goods are evidence that
through various media but not paid for by an the seller has (or has not) provided what the
identified sponsor. customer was expecting.

3. Personal Selling involves oral communication PEOPLE

with one or more prospective buyers by paid
representatives for the purpose of making
sales. Normally, this is done through door to - People marketing entails endeavors aimed at
door selling. cultivating the attention, interest and
preferences of a target market toward a
4. Sales Promotion involves paid marketing celebrity or authority figure. These celebrities
communication activities that stimulate could be real individuals or fictitious ones. (p.
consumer purchases and dealer effective. Any 31 Principles of Marketing by Serrano 2016)
activity that offers an incentive for a limited
period to induce a desired response from
 - People can be considered as product by - Packaging is a group of activities in product
providing satisfaction to the consumer. These planning which involve designing and
are the celebrity, model, artist, dancer, singer producing container or wrapper for a product.
and the like.
CRITERIA FOR CHOOSING PACKAGING MATERIALS
- Businesses can improve their ability to attract,
1. PROTECTION
retain and improve productivity by applying
the following five-step PRIDE process: 2. DISPLAY VALUE
3. COST
P - Provide a Pleasant Working Environment 4. CONVENIENCE
R - Recognize, Reward and Reinforce the Good 5. SIZE
Behaviour
I - Involve and Participate in the activities and
programs
POSITIONING
D - Develop Skills and Attitude
E - Evaluate and Measure Performance
- Positioning refers to how the firm
Networking differentiates their product or service from
- It involves socioeconomic business activity by those of the competitors and serving a niche.
which entrepreneurs and business people
- The objective of positioning is to establish the
meet to form business relationships to
firm's product or service identity in the mind
recognize, create, or act upon business
opportunities, share information and seek of the buyer.
potential partners for business ventures.
Product Positioning is placing a brand in that part
of the market where it will have an approving
PROCESS acceptance compared with competing brands.

Product repositioning means reviewing the

- Refers to a "the set of activities that results in current position of the product and its marketing
delivery of the product benefits". A process mix and seeking a new position for it that seems
could be a sequential order of tasks that an more appropriate.
employee undertakes as a part of their job.
- It can represent sequential steps taken by a
Market Positioning is developing a product and
number of various employees while
brand image in the minds of consumers. It can
attempting to complete a task.
also include improving a customer's perception
about the experience they will have if they
choose to purchase a company's product or
PACKAGING service.

MARKET POSITIONING
- It should be properly designed to attract the 1. Innovator/Leader or Follower
customers. A package is the container or the 2. Domestic or International/Global
wrapper of the product. 3. Quality or Price
- Package gives significant and different
advantages over other products in the market.