GOOD

AFTERNOON!
Risk Reduction Management
 Marketing Mix

The marketing mix refers to the set of actions, or

tactics, that a company uses to promote its brand or
product in the market. They are a combination of
factors that can be controlled by a company to
influence consumers to purchase its products.

The four Ps that typically make up the marketing mix

are: Price, Product, Promotion and Place. Three more
Ps-People, Packaging, Positioning.
A. Product

To begin, develop the habit of looking at your

product as though you were an outside marketing
consultant brought in to help your company decide
whether or not it's in the right business at this time.
 B. Price
The second P in the formula is price. Develop the habit of
continually examining and reexamining the prices of the
products and services you sell to make sure they're still
appropriate to the realities of the current market. Sometimes you
need to lower your prices. At other times, it may be appropriate
to raise your prices. Many companies have found that the
profitability of certain products or services doesn't justify the
amount of effort and resources that go into producing them.
 Product costs and consumer
Pricing perceptions of the product's value
set the extreme points at which you

Methods should set prices. When you set

prices below product cost. do not
expect earn profits no matter how
many units you sell. On the other
hand, if you set prices too high,
customer will hesitate to buy
because they perceive your product
to be overvalued. Be sure to set
prices between these extreme
points with due considerations of
both the internal and external
factors.
 Cost-based Pricing
most businesses set their prices on
Three Basic the basis of how much went into
the cost of producing the product.
Pricing All costs are added and divided
by the number of units produced
Methods (the markup is added as well).
However, this pricing method
fails to address demand and the
competitor's price.
Cost-plus Pricing

this is the simplest of all the pricing methods. All costs

are added up and then divided by the number of units
produced. A certain percentage, commonly known as the
markup, which represents the desired return on the sale,
is added to arrive at the selling price. This method may
be the easiest but it fails to take into consideration other
factors such as demand and the competitor's price.
 Break-even Pricing
minimum price is determined
at the level where total sales
equal total cost. The break
even selling price, volume,
and sales can be determined
using the general equation:
 C. Place
Because services generally are purchased and used at the same time,
the location where the service is delivered plays a role in the
promotion, price and product. Part of the reason plumbers and other
home-repair professionals charge so much is that they must deliver
their service one customer at a time away from their office or shop.
A barber can service customers one after another, but he must
consider his shop's appearance and location in his placement
decisions.
D. Promotion
Promotion is how a business markets
its services. Promotion strategy
includes developing branding,
slogans and logos that convey the
intangible benefits the service
provides.
 Types of
Promotion
Discounted Products

Customers of all types love to buy discounted or bargain

products. Sometimes even those who don't have any plan
of buying are forced to buy to avail of the offer. A
business usually considers this type of strategy to generate
sales especially during lean months. Sometimes the same
is being done in order to let go of some inventories. The
business however must refrain from doing this too often
as this will be interpreted as the norm and the business
model might suffer. Thus, to make discounts as effective
promotion strategies the following must be observed:
• Make sure that
• There is an
your offer can
effect in your
really lure your
profitability.
customer.
 This tactic attracts
customer which holds the
Free Delivery and
idea that products
purchased are guaranteed
Acknowledge
to be of good quality and as Return
an assurance return is
welcomed.
 Flash Sales

A flash sale is basically an offer that only lasts

for a limited time and it's a great way to create a
sense of urgency for the customer to buy. Many
retailers are now adopting this strategy as a way
to sell more products and get rid of surplus
stock.
Buy more,
save more
This move entices the
customer to purchase more
even those whose budget is
limited only. A value for
your money seems hard to
resist. The promotion
attracts a repeat purchase
concept.
 Filipinos love to have samples first
before they actually buy the product.
Giveaways must be properly planned
as this may backfire to the business,
especially if the giveaways are of
Product poor quality. Customers might create

giveaways or the impression attached to your

product or service. That's why a

branded gifts business must be very careful in

making a promotion like this one,
especially where the items are
bought from unknown suppliers.
 E. People
The most important resource of any organization is its people.
Much of how customers rate the service experience hinges on the
person delivering it. Professionalism and courtesy go a long way in
any service business. Other attributes become critical depending on
what services are being offered - discretion in a psychiatric
practice or tact in funeral services, for instance. Oftentimes, a
company's reputation can be seen on the way their people behave.
A company full of happy, courteous, and loyal people is a very
good indication that they are satisfied with the way they are treated
and therefore a plus factor for the company's reputation.
 The fifth element in the

F. Packaging marketing mix is the

packaging. Develop the
habit of standing back and
looking at every visual
element in the packaging of
your product or service
through the eyes of a
critical prospect.
Remember, people form
their first
 POSITIONING

The next P is positioning. You should develop the habit of

thinking continually about how you are positioned in the
hearts and minds of your customers. How do people think
and talk about you when you're not present? How do people
think and talk about your company? What positioning do you
have in your market, in terms of the specific words people
use when they describe you and your offerings to others?
POSITIONING