ENTREP|LESSON 5 Flashcards
Is a set of controllable and
connected variables that a
company gathers to satisfy a customer better than its
competitor
MARKETING MIX
- It is also known as the “Ps” in marketing.
MARKETING MIX
Originally, there were only __Ps but the model has been continually modified until it became 7P’s.
4
The original 4 P’s stands for?
product
place
price
promotion
7Ps
PRODUCT
PRICE
PLACE
PROMOTION
PROCESS
PHYSICAL EVIDENCE
PEOPLE
The first P in the Marketing Mix is the?
PRODUCT
Marketing strategy typically starts with the?
PRODUCT
- Marketers can’t plan a distribution system or set a price if they don’t know exactly what the ________
will be offered to the market.
PRODUCT
refers to any goods or
services that are produced to meet the consumers’ wants, tastes
and preferences.
PRODUCT
Goods can be categorized into?(2)
business goods
consumer goods
Services can be categorized into?(2)
consumer services
professional services
is the second P in the
Marketing Mix.
represents the location
where the buyer and seller
exchange goods or services.
It is also called the distribution channel.
It can include any physical store as well as virtual stores or online shops on the Internet
matters for a business of any size.
It is a crucial part of the marketing mix.
PLACE
The main function of a _________ is to provide a link
between production and
consumption.
distribution channel
contains two stages
between producer and consumer
- a wholesaler and a retailer.
- A wholesaler typically buys and stores large quantities of several
producers’ goods and then breaks into bulk deliveries to supply retailers with smaller quantities.
- For small retailers with limited order quantities, the use of wholesalers
makes economic sense.
CHANNEL 1
PRODUCER→WHOLESALER→RETAILER→CONSUMER
CHANNEL 1
- contains one
intermediary. - In consumer markets, this is typically a retailer.
- A retailer is a company that buys products from a manufacturer or wholesaler and sells them to end users or customers.
- In a sense, a retailer is an
intermediary or middleman that customers use to get products from the manufacturers.
CHANNEL 2
PRODUCER→RETAILER→CONSUMER
CHANNEL 2
is called a
“direct-marketing” channel, since it has no intermediary levels.
- In this case the manufacturer sells
directly to customers
CHANNEL 3
PRODUCER→CONSUMER
CHANNEL 3
is the value of money in
exchange for a product or service.
- Generally speaking, the price is the amount or value that a customer gives up to enjoy the benefits of having or using a product or service.
- Thus, customers exchange a certain value for having or using the product – a value we call_______
PRICE
In commerce, price is determined by: (3)
- Buyer is willing to pay
- Seller is willing to accept
- The competition is allowing to be charged.
It is when the price charged for products and services is set artificially low in order to gain market share. Once this is attained, the price can be higher than before
penetration pricing
if you are going to open a
Beauty Salon, you need to set your prices lower than those of your competitors so that you can penetrate the market. If you already have a good number of market share then you can slowly increase your price
penetration pricing
VARIABLES THAT INFLUENCE SETTING OF PRICE
A. Availability of the competing products
B. Cost of making the product
C. Type of product
D. Presence of the substitute product
E. Stages of the product in
the market
F. Demographic profile of the target customers
- When the supply of the competing products is high, the price of the
product is usually low. - Producers tend to gradually pull down the prices when the supply
is high, and adopt a reverse mechanism when the supply is low. - As an entrepreneur you must know the level of supply and demand for
the product.
AVAILABILITY OF THE COMPETING PRODUCTS
- The term ____ simply refers to the amount spent by the manufacturer in view of the expected future benefits.
- The manufacturing cost includes the direct materials, direct labor,
and factory overhead. - The basic rule is that the
entrepreneur should not set a price lower than the cost involved in making the product
COST OF MAKING THE PRODUCT
ELEMENTS OF COST
Direct Labor
Direct Materials
Factory Overhead
- refers to the wages paid to the workers who are directly involved in manufacturing the product
Direct Labor
- pertain to the materials that form part of the finished product.
Direct Materials
- includes indirect materials, labor and other expenses like cost of
light, water, fuel, or machinery maintenance.
Factory Overhead
Products are broadly classified into:(2)
industrial products
consumer products
Are used as raw materials of other manufacturing entities.
- These products usually have higher prices compare to consumer products.
INDUSTRIAL PRODUCTS
- Are used and consumed by individual consumers.
- These products may be further classified into convenience product, shopping, product, and
highly-priced product.
CONSUMER PRODUCTS
- The presence of substitute products is a threat to the primary
product. - Substitute products basically set the limit to the selling price of the primary product.
- The consumers can easily switch and buy the substitute products with lower prices especially when the primary is not available
PRESENCE OF SUBSTITUTE PRODUCTS
