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
STAGES OF THE PRODUCT IN THE MARKET (4)
- Introductory Stage
- Growth Stage
- Maturity Stage
- Decline Stage
- Since the final buyers are the consumers, their demographic profile highly influences the process of setting the most appropriate prices of the goods or service.
- For instance, consumers who belong to the higher economic status in the community usually buy the products that are highly
priced.
DEMOGRAPHIC PROFILE OF THE TARGET CONSUMERS
Demographic profile of
the target customers (2)
- Psychological pricing
- Discount pricing
PSYCHOLOGICAL PRICING (2)
Promotional Pricing
Odd or even pricing
where products are sold at a lower price in a limited temporary period like
midnight sale, Christmas sales or Anniversary sale.
Promotional Pricing
where products sold at prices that end in odd number 5 like P99.95, P199.5, or P399.5 appear cheaper compared to products with prices
that end in even number 0 like P100, P200, and P400.
Odd or even pricing
- The entrepreneur may resort to discount pricing to keep up with the competition in the market,
recreate interest in the product, and get rid of the old stock.
DISCOUNT PRICING
refers to the complete
set of activities, which
communicate the product brand or service to the user.
- The idea is to create an
awareness, attract and induce the consumers to buy the product, in
preference over others.
- The following are the most common medium in promoting a product
and this is called promotional mix.
PROMOTION
PROMOTION MIX (4)
- Advertising
- Personal selling
- Sales promotion
- Direct marketing
● Radio
● Television
● Print
● Electronic
● Word of Mouth
ADVERTISING
- Occurs when an individual salesperson sells a product, service or solution to a client.
- Salespeople match the benefits of their offering to the specific needs of a client
PERSONAL SELLING
- Any initiative undertaken by an organization to promote an increase in sales, usage or trial of a
product or service.
SALES PROMOTION
Sales Promotion Technique (5)
● Free gifts
● Free samples
● Free trial
● Customer prize
● Special pricing
- A promotional method that involves presenting information about your
company, product, or service to your target customer without the
use of an advertising middleman.
DIRECT MARKETING
Forms of Direct Marketing: (8)
● Roche
● Coupons
● Catalogs
● Email
● Fliers
● Phone calls
● Newsletter
● Text messages
- Your team, the staff that makes it happen for you, your audience, and your advertisers are the people in marketing.
- This consists of each person who is involved in the product or service whether directly or
indirectly. - ______ are the ultimate marketing strategy, they sell and push the product.
- _____ are one of the most
important elements of the
marketing mix today
PEOPLE
- __________ is a silent hero in the marketing world.
- __________ refers to the outside appearance of a product and how it is presented to the customers.
- The best ___________ should be attractive enough and cost efficient for the customers.
- _________ is highly functional. It is for protection, containment,
information, utility of use and promotion.
PACKAGING
FIVE BASIC FUNCTIONS OF PACKAGING
A. Protection
B. Containment
C. Information
D. Utility of use
E. promotion
- One of the major functions of packaging is to provide for the effects of time and environment for
the natural and manufactured products. - The protection function can be divided into some classes.
PROTECTION
Reasons for Protection in Packaging (4)
- Natural deterioration
- Physical protection
- Safety
- Waste reduction
- It is caused by the interaction of product with water, gases and fumes, microbiologic organisms like bacteria, yeasts and molds, heat, cold, dryness, contaminants and insects and rodents.
NATURAL DETERIORATION
- The packaging is also used for_____________ ___________, which include
improving shock protection, internal product protection and reducing shock damage caused from vibration, snagging, friction
and impact
PHYSICAL PROTECTION
- A special kind of protective packaging is required for products
that are deemed harmful to those who transport them or use them. - These products include extremely inflammable gas and liquid, radioactive elements, toxic materials etc. The packaging should
also be done so that children could not easily use or dispose them.
SAFETY
- Packaging also serves to reduce the amount of waste especially in case of food distribution
WASTE REDUCTION
- This involves merging of unit loads for shipping.
- It starts with spots of adhesives on the individual shippers that stick them together, straps of steel and plastic, entire coverings of shrinkable or stretchable plastic films and paper or corrugated
wraps that surround an entire pallet of product
CONTAINMENT
- The packaging conveys necessary information to the consumers.
- The common information that packaging provides include general features of the product, ingredients, net weight of the contents, name and address of the
manufacturers, maximum retail price (MRP).
INFORMATION
- The convenience packaging has been devised for foods, household chemicals, drugs, adhesives, paints,
cosmetics, paper goods and a host of other products. - This type of packaging includes dispensing devices, prepackaged
hot metals, and disposable medical packaging
UTILITY TO USE
- Companies use attractive colors, logos, symbols and captions to promote the product that can influence customer purchase decision
PROMOTION
- When a company presents a product or service in a way that is
different from the competitors, they are said to be “positioning” it. - Positioning refers to a process used by marketers to create an image in
the minds of a target market.
POSITIONING
- Solid positioning will allow a single product to attract different customers for not the same reasons.
SOLID POSITIONING
two people are interested
in buying a phone; one wants a phone that is cheaper in price and fashionable while the other buyer is looking for a phone that is durable and has longer battery life and yet they buy the same
exact phone.
SOLID POSITIONING
THREE BASIC CONCEPTS FOR POSITIONING
- Functional positions
- Symbolic positions
- Experiential positions
- deal with solving a problem, providing benefits and getting a
favorable perception from
investors, stockholders and
consumers
FUNCTIONAL POSITIONS
- deal with self-image enhancement, ego identification, belongingness,
social meaningfulness and affective fulfilment
SYMBOLIC POSITIONS
- deal with providing sensory or cognitive stimulation
EXPERIENTIAL POSITIONS
- Is a name, symbol, or other feature that distinguishes a seller’s goods or services in the marketplace.
- Your brand is one of your greatest asset because your brand is your customers’ over-all experience of your business.
BRAND NAME
is a long-term design for the development of a
popular brand in order to achieve the goals and objectives.
- A well-defined brand strategy shakes all parts of a business and is directly linked to customer needs,
wants, emotions, and competitive surroundings.
BRAND STRATEGY
- is a powerful and sustainable high-level marketing strategy used to create or influence a brand.
- as a strategy to distinguish products and companies and to build economic value to both customers and to brand owners, is described by
Pickton and Broderick in 2001.
BRANDING
BRANDING (7)
A. Purpose
B. Consistency
C. Emotion
D. Flexibility
E. Employee involvement
F. Loyalty
G. Competitive awareness
“Every brand makes a promise. But in a market in which customer confidence is little and budgetary observance is great, it’s not just making a promise that separates
one brand from another, but having a significant purpose, “ (Allen Adamson).
PURPOSE
2 Purpose of Branding
- Functional
- intentional
- This way focuses on the
assessments of success in terms of fast and profitable reasons. - For example, the purpose of the business is to make money
FUNCTIONAL
- This way focuses on fulfillment as it relates to the capability to generate money and do well in the
world.
INTENTIONAL
- The significance of consistency is to avoid things that don’t relate to
or improve your brand. - Consistency aids to brand
recognition, which fuels customer loyalty
CONSISTENCY
- There should be an emotional voice, whispering “Buy me”.
- This means you allow the
customers to have the chance to feel that they are part of your brand. - You should find ways to connect more deeply and emotionally with
your customers. - Make them feel part of the family and use emotion to build relationships and promote brand loyalty
EMOTION
- Marketers should remain flexible too in this rapidly changing world.
- Consistency targets at setting the standard for your brand, flexibility
allows you to adjust and
differentiate your approach from your competition.
FLEXIBILITY
- It is equally important for your employees to be well versed in how they communicate with customers and represent the brand of your product
EMPLOYEE INVOLVEMENT
- is an important part of
brand strategy. - At the end of the day, the emphasis on a positive relationship between
you and your existing customers sets the tone for what potential customers can expect from doing business with you.
LOYALTY
- Do not be frightened of
competition. - Take it as a challenge to improve your branding strategy and craft a better value in your brand.
COMPETITIVE AWARENESS
- refers to the amount added to the cost to come up with the selling price.
Mark up
The formula for getting the
mark up price is as follows:
( Cost x desired mark up percentage)
