CHAPTER

4:
LET THE
MARKET
KNOW YOU
BETTER
• Marketing is about creating and
accumulating customers. Marketing plans
are designed to capture market share and
defeat competitors. The marketing
function and the marketing mix serve the
overall business strategy. It is summarized
in seven (7) Ps by which the enterprise will
engage competitors and gain customers.
 7 Ps
The 7 Ps are a set of recognized marketing
tactics, which you can use in any combination
to satisfy customers in your target market.

POSITIONING PRODUCT PACKAGING

 7 Ps

PLACE PEOPLE PROMOTION

 7 Ps

PRICE
 POSITIONING

In the context of a marketing battle

plan, it has three overlapping objectives
 3 Overlapping Objectives
1. Enterprise Perspective
• Scans the market
environment and decides
to position itself with
products that specifically
address the needs of a chosen target
market.
 3 Overlapping Objectives
2. Competitive Perspective
• The enterprise has to
differentiate and
distinguish itself from
its competitors.
 3 Overlapping Objectives
3. Customers Perspective
• Positioning is the way
the customers perceive
the enterprise and its
products or services in
their minds
 POSITIONING

Enterprises can establish their

positioning either by starting with their
own product creations or with their
customers’ outcome expectations.
Competitive Landscape
• The competitive landscape of the
enterprise, relative to its market, can be
clearly mapped out by laying out both the
latitudinal and longitudinal market
dimensions.
 Latitude

• Lays out what is important to

the different customer segments
from their differing points of
view.
 Longitude

• Represents the product features

and attributes of competitors in
the marketplace.
The latitudinal and longitudinal
dimensions will draw the parameters of
the map, locating both the customers and
the competing enterprises in their
respective positioning.
 LONGITUDE
LATITUDE
 PRODUCT

• is the tangible good or intangible

service that the enterprise offers to
its customers in order to satisfy their
needs and to produce their expected
results.
 PRODUCT

• Products are often identified with their

brand names to distinguish them from
other products in the market. Some
products have built up so much loyalty to
the point that their brand names have
become their best selling proposition.
 four general types of products that are
marketed by enterprises:
1. Breakthrough Products
• Offer completely new performance
benefits.
• Marketing breakthrough products need
a higher level of customer education
and orientation.
2. Differentiated Products
• Try to claim a new space in the mind of the
customer different from the spaces occupied
by existing products.
3. Copycat Products
• will not make much impression on the
consumer’s mind.
4. Niche Products
• do not intend to compete directly with the
giants.
 PACKAGING
• There used to be a time when
products came wrapped in ordinary
packaging that prominently displayed
the brand name, the main attributes
of the product, the company’s logo,
and its place of business.
 PACKAGING
• Packaging came in a small,
medium, and large sizes without
much variation in the material,
shape, and purpose of the
packaging. That is a time long
gone.
 PACKAGING

• Today, packaging serves several

important purposes, which
elevate it to one of the seven P’s
of marketing.
• First, packaging identifies the product,
describes its features and benefits, and
complies with government rules on
specifying its contents, weight, chemical
composition, and potency. Packaging
provides easy brand identification for the
customers.
• Second, packaging differentiates the
product from its competitors and even
from its other brand offerings. For
example, liquor brands differentiate their
premium scotch and brandy offerings by
packaging them in ceramic bottles.
• Third, packaging lengthens the lifespan,
physically protects, and extends the
usefulness and the product. Vacuum-
packed or aseptically packaged products
prolong the shelf lives of many food and
beverage items. High-tech packaging
protects fragile and sensitive products like
crystal sculptures, laptops, precision tools
and the like.
• Fourth, packaging has become an
environment issue by itself. Many
packages are discarded after the contents
have been taken out. This generates
waste and poses packagers and customers
alike.
• Fifth, the aforementioned purposes of
packaging have increased the cost of
packaging and, therefore, the price of the
product. To counteract this, the packaging
must possess its own value proposition
for the customers as well as for the
enterprise.
 PACKAGING
• Packaging does not refer only to the
wrapper or container of the product. It can
mean the bundle of products or services
that are put together to attract and delight
customers. It can also mean the terms and
conditions attached to the sale servicing of
the product.
 PLACE
• “ Location. Location. Location.”
• this is the often-recited mantra of
salespeople who want to have the best
access to their customers. Although finding
a good location proves to be challenging,
even more challenging the potentials of that
location.
 Initial Location Screening

In finding a good location, one needs to consider

the following:  
1. The number of customers residing of working
in the areas, and the number of customers
who frequently pass through the area.  
2. The density or number of customers per unit
area.
3. The access routes to alternative locations
and their traffic count in those routes.  
4. The buying habits of customers or where
they buy, at what time and how frequent.  
5. Locational features such as parking spaces,
foot access, creature comforts, and the
like.
 In similar way, the entrepreneur must be
able to determine the price that comes with
the location because it will spell out the
success or failure of the business. The
entrepreneur has to consider the following:
 

1. The cost of buying or renting, renovating

and operating the location.
2. Customer volume, drop in rates ( what
percentage of customers, traffic would stop by
the store) in sales conversion ratios ( what
percentage of drop ins would actually purchase
something from the store).  
3. Revenues based on the volume and mixed of
goods and services expected to be sold at
certain prices.  
4. Profits.
In addition to the above factors, the final choice
of location must be based on the following:
1. Image and location conditions. This differs to
the physical look of a location, sanitary
conditions, crime and safety levels etc. the
reputation of a location is also important.
2. Exact fit to target customers. Is the location
traffic generally composed of your target
customers?
3. Clustering of competitor establishments. This
oftentimes results in drawing a bigger market to
the location.  
4. Future area development. A certain location
might not have the most customers or the best
economics in the short term, but it might
become a central business hub within the next
five years.
5. Fiscal and regulatory requirements. An
entrepreneur would want to set up shop
in a town or city with low tax rates,
good governance, excellent
infrastructures, and great public
services.
 Relevant Location Drivers
The entrepreneur can make use of the following
relevant location drivers for location selection. These
are the ‘musts’ in choosing the location for your
business.  
1. Physical Proximity to Target Market  
• For most entrepreneurs, locations are chosen based
on how close it is to the target market. However,
physical proximity is not always important.
2. Customer Traffic Flow  
• refers to the people that regularly come into
contact with your business establishments.
• Higher traffic flows mean higher drop-in rates
for stores along the traffic route. Important
data to research include daily volume of people
and/or vehicles passing through, as well as
information on the “peak hours” and the “
slow hour”.
3. Industry Clustering  
• A lot of competitors clustered in one location
usually draw on a bigger market to the area.
Three stores side-by-side offer more choices to
customers than one stand-alone store. The
downside is that clustering also results in fiercer
competition. As such, some entrepreneurs
prefer to establish a monopoly far away from
competitors.
4. Convergence of multiple Industries  
• Locations where multiple industries
converge, such as central business
districts, shopping malls and public
markets are able to attract more
customers because of one-stop shopping
convenience. But again, competition is
usually strong in such areas.
5. Population Concentrations.  
• Urbanization creates population
concentrations. Where people live, goods and
services follow. The greater number of people,
the greater the number of needs and wants to
be satisfied. Simply put, the more populous the
location is, the greater is the opportunity for
business and profit.
6. Activity Hubs  
• Activity hubs such as large schools, high-
rise buildings, public parks, transport
terminals, and entertainment centers
provide good location potentials for food
establishments and client-specific
services.
7. Growth Potential  
• Business are always looking for new areas to
expand and grow. This is especially the when
crowded population centers become saturated
with many providers of goods and services.
Hence, the new development site will e natural
greener pasture for early locators. The early
locators will catch the early customers.
8. Business Climate  
Enterprises prefer locations that are conductive
in doing business. This includes areas with:  
-High economic growth  -Low crime rates  
-Stable political situation   -Good fiscal incentives
-Effective social services   -Trusted public officials
-Good infrastructures  
-Cheap utilities  
-Efficient transportation and logistics  
-Availability of skilled labor force  
9. Cost of Doing Business and Producing Goods
and Services  
• For industrial establishments, the more
relevant criteria are those locations with lower
cost of doing business and lower cost of
producing goods and services. Hence, these
industrial establishments would prefer
locations outside the main population centers
but with government-supplied amenities.
 Cooperative Location
Analysis
Perhaps the most common way by which an
entrepreneur ‘surveys’ a potential locations is through
comparing it with other locations with more or less the
same features and tenant mix or clusters of competitors.
These locations must have that ‘extra something’ that
makes competitors fight for a store space within the same
area. Keen observation is required for an entrepreneur if
he or she wants to draw several insights from these
favored locations.
 Geography and Atmospheric
Another way of looking atDeterminants
a location or place to
sell the product or service can be based on two
major place determinants: geography and
atmosphere. Within each determinant, there are
extreme opposite qualities that create a dilemma
for the entrepreneur. To better understand what
these dilemmas are, let us take a look at each one
of these determinants.
For the geography determinant, there are six
decision tensions:
 

1. Concentration versus Destination  

2. Access versus Abundance  
3. Clustered versus Dispersed  
4. Developed versus Underdeveloped  
5. Physical versus Virtual  
6. Upscale versus Downscale
For the atmosphere determinant, there are
five decision tensions:
1. Formal versus Informal
2. Exclusive versus Public
3. Conservative versus Adventurous
4. Aesthetics versus Functionality
5. Minimalist versus Maximalist
Atmosphere refers to the state or condition of
the environment, which affects the mind and
mood of customers, either in a positive or
negative way.
The geography and atmosphere decision
tensions provide alternative choices to the
marketing strategist. The final decision would
depend on the positioning of the enterprise
and its products in the marketplace.
 PEOPLE
• People are the ultimate
marketing strategy. People
sell and push the product.
People search hard to find
the right market. People distribute,
promote, price, and sell the products in the
most attractive market places.
 PEOPLE
• People aim to please the
customers have bought the
product. People are the
regular contact points
between the enterprise and its market.
• The people in a marketing organization play a
crucial role in the success of the enterprise.
 The marketing efforts of people are organized at four
levels:
1. To create customer awareness;  
2. To arouse customer interest;  
3. To educate customers as to evaluate their
buying choices; and  
4. To close the sale and deliver the products.
 To arouse the interest of customers, the
enterprise can use several people or organizational
modalities.  
• First modality- is to outsource the people from
advertising agencies, events management
outfits, call centers, and telemarketers.
• Second modality- is to build in-house
capabilities by hiring market researchers, brand
managers, salespeople, public relations officers,
website writers, orchestrators, etc.
• Third modality- is to collaborate or enter
into partnership with principals,
distributors, dealers, and industry
associations.
 Educating customers in their evaluation process
requires the enterprise to know the customer’s
decision-making process.
1. What and who are involved in the buying
process?
2. Where are the customers in the buying process?
3. What are the next steps of the customers and
how can the company facilitate their next
steps?
Consumer Evaluation Process
(Next slide)
 INITIAL MID PROCESS FINAL
PROCESS PROCESS
Consumer Evaluation Process
• Comparison of • Customers who have • Tastes test
product features and tried the products • Physical demo
probable results by: before • Free trial period
- Window shopping • Professional • Money-back
- Internet browsing evaluator’s guarantee offer
- Brochures collection guidebook on
and comparison competing products
- Asking friends and • Testimonials from
relatives credible endorsers
• Word of mouth • How often others are
feedback seen actually using
• Gut reaction the product or
services
 Finally, the sale must be closed and the products
should be delivered to the customer. Closing the sale
demands that the product be available, adequate,
acceptable, and affordable.
 

Availability means that the enterprise has the goods

or services on hand.
Accessible means that the customers can easily get
the product from their usual buying places or the
products can be conveniently delivered to them.
Adequate means the product meets the quality
and delivery specifications of the customer.
Acceptable means that the customer is convinced
by the selling points of the product, finds very little
or no objectionable features in the products, and
accepts the conditionality, warranties, and
amenities given by the seller.
Affordable means the price and terms are right.
 The organizational modality to educate the
customers, help them in their decision-making
process, and to close the sale would depend on
four variables.  
1. Is there a need for high contact (face to face) or
will low contact (Internet) be sufficient?  
2. Is their a need for high accessibility? If so, the
company requires distributors, dealers,
branches, and franchisees to expand their
reach.
3. How heavy or light is the transaction cost?
High transaction cost products need new
competent people to sell them.  
4. Does the customer need a lot of sale
servicing and after-sales servicing.
 PROMOTION

• Promotion is the explicit communication

strategy adopted by an enterprise to elicit
the patronage, loyalty, and support not
only from its customers but also from its
other significant stakeholders.
 PROMOTION

• Promotion encompasses all the direct

communication efforts of the enterprise, such as
advertising, public relation campaigns,
promotional tours, product offerings, point-of-
sale displays, website, flyers, emails, letter,
telemarketing, and others.
 Effective promotion depends on three critical factor:

• The credibility of the communicator;

• The message and the medium of the
message; and
• The receptiveness of the audience to all
that is being communicated.
• Before crafting promotion and communication
strategy, the communicator must profile the
target audience very well.  
• For business promoter, it is important to get
very positive emotional reaction from the target
audience. All messages must make an impact on
the target audience-sensory, emotionally, and
intellectual impact at that.
• In developing a promotion campaign, the
enterprise should start with the target
audience in mind.  
• At the beginning of its operations, the
enterprise may have a very limited market
to cover. The narrower the market
coverage, the more focused the promotion
campaign should be.  
• As then targeted audience becomes bigger, then
marketer can shift to a shotgun approach.
Electronic mails, websites, letter blasts, radio
broadcasts, and print ads in certain publications
might serve the purpose.  
• For mass markets, television commercials,
ubiquitous billboards, and high-circulation
broadsheets, magazines or tabloids would
already be cost effective and create quite an
impact.
 PRICE

• Pricing depends on the business objectives

set by the enterprise. While price is a
major factor for the customer in buying a
product, it is not the only factor such as in
the case of buying premium products.
 PRICE
• Non-price factors outweigh the price factor
whenever a customer is buying a premium item
because he or she is more particular about the
‘premium-ness’ in terms of quality, the status or
image that the product brings, shorter waiting
time or immediate delivery, and other such
decision criteria.
 The enterprise should set the prices of its
products or services based on its business
objectives such as the following:
1. Profit maximization  
2. Revenue maximization  
3. Market share maximization
4. Attainment of the desired prestige or
quality leadership
5. Penetration, survival, or liquidation  
6. Scarcity pricing or market skimming  
7. Cost recovery  
8. Subsidy pricing  
9. Marginal pricing
The first three pricing strategies pertain to the
related dynamics of the different price ranges
applied across different product volumes or
quantities while considering the product costs
incurred as these products are brought or sold.
 PROFIT, REVENUE, AND MARKET
PRICE
SHARE
VOLUME
MAXIMIZATION
TOTAL
REVENUES
TOTAL
COSTS*
TOTAL
PROFITS
UNIT COST

P 10 100 P 1,000 P 800 P 200 P 8.00

P 12 90 P 1,080 P 750 P 330 P 8.33

P 14 75 P 1,050 P 675 P 375 P 9.00

P 16 60 P 960 P 600 P 360 P 10.00

P 18 50 P 600 P 550 P 350 P 11.00

*Assumes the following: Fixed Costs equal P 300; Variable Costs equal P 5 per unit
• One market research approach in estimating the
demand , given the difference price levels, is to
conduct a price tolerance survey of randomly
selected respondents.  
• As mentioned earlier, prices could be set at a
premium to project a quality image and to
distance the product from its inferior
customers. The idea is to attract customers who
are willing to pay extra for the quality
difference.
• At the other end, prices can be set very low to
survive in a competitive market or to get rid of
mounting inventories and convert them into
cash. The other objective of a low pricing
strategy is to penetrate the market fully and
overtake the competition.  
• Products that are very scarce or rare would
appeal to wealthier customers who wish to
belong to an exclusive club of owners.
THANK
YOU!