Lesson 5: 7P's of Marketing and Branding Flashcards
third P of the marketing mix
price
the value of money in exchange for a product or
service
price
the amount or value that a customer gives up
to enjoy the benefits of having or using a product or service
price
customers
exchange a certain value for having or using the product – a value we call
price
price is determined by
what a customer is willing to pay; a seller is willing to accept; the competitor is allowing to be charged
most important factor affecting a small business’ revenue potential
pricing strategy utilized
The price charged for products and services is set artificially low in order
to gain market share. Once this is achieved, the price is increased.
penetration pricing
A company charges a higher price then slowly lowers the price to make
the product available to a wider market because it has a considerable
competitive advantage. However, the advantage tends not to be
sustainable. The high price attracts new competitors into the market, and
the price inevitably falls due to increased supply.
skimming prices
A pricing method in which a seller uses prices of competing products as a
benchmark instead of considering own costs or the customer demand. In
reality a firm has three options and these are to price lower, price the same
or price higher than competitors
competition pricing
The practice of reviewing and setting prices for multiple products that a
company offers in coordination with one another.
product line pricing
The act of placing several products or services together in a single
package and selling for a lower price than would be charged if the items
were sold separately.
bundle pricing
Setting the price of a product higher than similar products. The goal is to
create the perception that the products must have a higher value than
competing products because the prices are higher
premium pricing
the practice of setting prices slightly lower than
rounded numbers, in the belief that customers do not round up these
prices, and so will treat them as lower prices than they really are. This
practice is based on the belief that customers tend to process a price from
the left-most digit to the right, and so will tend to ignore the last few digits
of a price.
psychological pricing
The company earns more through cross-selling products along with a
basic core product. The main product does not have many features (and
is priced low) which can be enhanced through optional or accessory
products which are sold at premium by the same company.
optional pricing
involves adding a markup to the cost of goods and
services to arrive at a selling price. Under this approach, you add together
the direct material cost, direct labor cost, and overhead costs for a
product, and add to it a markup percentage in order to derive the price of
the product.
cost plus pricing
A pricing method in which a fixed sum or a percentage of the total cost is
added (as income or profit) to the cost of the product to arrive at its selling
price.
cost based pricing
A price-setting strategy where prices are set primarily on consumers’
perceived value of the product or service.
value based pricing
the fourth P of the marketing mix
promotion
refers to the complete
set of activities, which communicate the product, brand or service to the user.
promotion
The idea
is to create an awareness, attract and induce the consumers to buy the product, in
preference over others.
promotion
promotional mix includes
advertising; public relations (PR); personal selling; sales promotions; direct marketing; (social media)
what is under advertising
radio, television, print, electronic, word of mouth, generic
radio is
cheaper than TV advertising
The promotion of a particular commodity is without reference to a specific
producer, brand name or manufacturer. Producers join together to expand total
demand for the commodity, thereby helping their own sales. These activities are often
self-funded through assessments on marketing called check-off programs
generic advertising
involves
sharing information with the public using platforms that do not require a payment, such
as social media or through press releases shared with magazines and newspapers.
public relations
its goal is to shape public perception of a
business, presenting a positive image through various strategies to its various
constituents.
public relations
occurs when an individual salesperson sells a product, service
or solution to a client.
personal selling
Salespeople match the benefits of their offering to the specific
needs of a client.
personal selling
personal selling involves
the development of longstanding client relationships
five stages of personal selling process
prospecting; making first contact; the sales call; objection handling; closing the sale
any initiative undertaken by an organization to promote an
increase in sales, usage or trial of a product or service (i.e., initiatives that are not
covered by the other elements of the marketing communications or promotions mix)
sales promotion
sale promotion techniques
free gifts, free samples, free trial, customer contests, special pricing
used to offer consumers a lower price for a period of time or to
purchase in multiple quantities. For example, a retailer may offer a product that
normally costs 35 pesos at a price of 3-for-100-pesos during the promotional period.
special pricing
There are many ways to utilize this particular sales promotion technique. A newly
opened store, for example, may offer the first 10 customers free items worth 100
pesos.
free gifts
a technique used to introduce new products to the
marketplace. Samples give the consumer a chance to see how well they like a product
or try something they otherwise would not normally buy.
free samples
a way for a consumer to try a new product while eliminating risk. It
may be used when a product is unique to the marketplace.
free trial
offer the customer a chance to win prizes like cash or store
merchandise
customer contests
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
It is a targeted form of marketing that presents information of
potential interest to a consumer that has been determined to be a likely buyer.
direct marketing
forms of direct marketing
brochure, catalogs, fliers, newsletters, post cards, coupons, emails, phone calls, text messages
sixth P of the marketing mix
packaging
refers to the outside appearance of a product and how it
is presented to the customers
packaging
five basic functions of packaging
protection; containment; information; utility of use; promotion
protecting of function can be divided into some classes
natural deterioration; physical protection; safety; waste reduction
One of the major functions of packaging is to provide for the effects of time and
environment for the natural and manufactured products
protection
It is caused by the interaction of products 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 of use
Companies use attractive colors, logos, symbols and captions to promote the product
that can influence customer purchase decision.
promotion
packaging decisions include
packaging concept; engineering tests; visual tests; dealer tests; consumer tests
This defines what the package should be or do for the particular product in terms of
size, shape, materials, color, text, and brand mark and tamperproof ability
packaging concept
This will ensure that the package stands up under normal conditions
engineering tests
This is to ensure that the script is legible and colors are harmonious
visual tests
This is to ensure that the dealers find the packages attractive and easy to handle
dealer tests
This is to ensure favorable consumer response
consumer tests
seventh P of the marketing mix
positioning
refers to a process used by marketers to create
an image in the minds of a target market.
positioning
basic concepts of positioning
functional; symbolic; experiential POSITIONING
deal with solving
a problem, providing benefits and getting a favorable perception from investors,
stockholders and consumers
functional positioning
deal with self-image enhancement,
ego identification, belongingness, social meaningfulness and affective fulfilment
symbolic positioning
deal with providing sensory or cognitive stimulation.
experiential positioning
