Lesson 3: The Marketing Mix (7P's) In Relation To The Business Opportunity Flashcards
Several important frameworks to utilize
Marketing mix or 7Ps
What are the 7Ps?
- Product
- Place
- Price
- Promotion
- People
- Packaging
- Positioning
Any goods or services produced to meet the customers wants needs and preferences
Product
Two types of products?
- Business goods
- Consumer goods
- produced for other businesses
- derived demand
Business goods
- end users are consumers
- direct
Consumer goods
- location where exchange of products take place
- distribution channel (physical, virtual, online, internet stores)
Place
Three stages for place
- Producer - wholesaler (bulk) - retailer - consumer
- Producer - retailer (limited) - consumer
- Producer - consumer
Value of money in exchange for product or service
Price
What are the 11 strategies for price?
- Penetration pricing
- Skimming pricing
- Competition pricing
- Product line pricing
- Bundle pricing
- Premium pricing
- Psychological pricing
- Optional pricing
- Cost plus pricing
- Cost based pricing
- Value based pricing
From low price to gain market share which eventually increases
Penetration pricing
- from higher price then lowers the price for a wider market
- advantage tends not to be sustainable
- attracts new competitors, price falls due to increased supply
Skimming pricing
- seller uses prices of competing products
- price lowers, same, or higher than competitors
Competition pricing
- setting prices for multiple products that a company offers in coordination with one another
- products with complementary products
Product line pricing
- placing several products together in a single package and selling in a lower price
Bundle pricing
- setting the price of a product higher than similar products
- higher price = higher quality
Premium pricing
- setting prices slightly lower than rounded number
Psychological pricing
- earns more through cross-selling products along with a basic core product
- enhanced through optional/accessory products
Optional pricing
- adding mark up to the cost of goods
- direct material cost, direct labor cost, and overhead costs, added to markup percentage
Cost plus pricing
- a fixed sum or a percentage of the total cost is added (as income) to the cost of product
Cost based pricing
- prices are set primarily on consumers’ perceived value of the product or service
Value based pricing
- set of activities which communicate the product
- create awareness, attract and persuade comsumers
Promotion
5 strategies under promotion
- Advertising
- Public relations or PR
- Personal selling
- Sales promotion
- Direct marketing
Radio, television, print, electronic, word of mouth, generic
Advertising
- features your company is not paid for (PR package)
- shape public perception of a business (review)
Public relations or PR
longstand client relationships
- prospecting
- making first contact
- the sales call
- objection handling
- closing the sale
Personal selling
free gifts, free samples, free trial
- customer contests - chance to win prizes
- special pricing - lower prices, 3 for 100, buy 1 take 1
Sales promotion
- presenting information
- brochure, catalogues, fliers
Direct marketing
- they sell and push the product
- team, staff, audience, people in organization
People
- outside appearance, and how it is presented
- protection, containment, information, utility of use, and promotion
Packaging
- different from the competitors
- create an image in the minds of the target market
Positioning
Name or symbol distinguishing product/service
Brand name
Greatest assets because it shows your customers’ overall experience of your business
Brand
Long-term design for the development of a popular brand to achieve the goals and objectives
Brand strategy
- powerful high-level marketing strategy used to create or influence a brand
- strategy to distinguish products and companies and to build economic value to both customers and to brand owners
Branding
