The Marketing Mix (7P’s) in Relation to the Business Opportunity Flashcards
is a special tool used in the implementation of any business, which is made up of seven distinct but interconnected variables.
marketing mix
a set of controllable and connected variables that a company gathers to satisfy a customer better than its competitor.
marketing mix
The Traditional 4P’s
product, price, place, and promotion.
new 3p’s
people, packaging, and positioning.
The original components of the marketing mix were four different yet interrelated variables.
Such a framework was used for marketing decision-making of any form of business.
The essential pillars of the traditional 4Ps are
product, price, place, and promotion
In addressing the continuing concerns in the marketing industry, three other variables were added towards the creation of the current 7Ps:
people, packaging, and positioning.
The Extended 7P’s
Product
Price
Place
Promotion
People
Packaging
Positioning
Product
Price
Place
Promotion
People
Packaging
Positioning
The Extended 7P’s
refers to any item that is produced to satisfy the needs and demands of a certain group of people.
It has a life cycle that revolves around its growth, maturity, and after-sales performance.
product
refers to any goods or services that is produced to meet the consumers’ wants, tastes and preferences.
product
2 types of goods
consumer goods
business goods
2 types of services
consumer services
professional services
2 consumer services
lawn care
hair styling
3 professional services
Engineering
Accounting
Consultancy
2 classification of products
Tangible Products (Goods)
Intangible Products (Services)
Tangible Products
(Goods)
Intangible Products
(Services)
Those items that have physical presence.
The benefits of these products can be evaluated based on the visual comparisons.
Tangible products (goods)
One of the primary keys in marketing tangible products is providing the consumers with the benefits they are looking for.
Tangible products (goods)
Selling tangible products allows businesses to present the product’s physical attributes directly to their customers, an advantage when it comes to marketing and sales strategies as it helps customers in assessing the product quality before purchase.
Tangible products (goods)
an advantage when it comes to marketing and sales strategies
it helps customers in assessing the product quality before purchase.
Intangible products are those items that have no physical presence and can only be felt indirectly.
The most popular are usually products that exist digitally, such as licenses and software.
intangible products (services)
Despite not being a physical product, intangibles are still extremely valuable, though their value is a bit more difficult to sell.
intangible products (services)
2 products that exist digitally,
licenses
software
Intangible product examples include, but are not limited to:
Education
Data
Software
Insurance
Maintenance and repair
Consulting and advice
Accounting
Copyrights, trademarks, and patents
2 types of products
Consumer Product (B2C)
Business Product (B2B)
sold to individuals to satisfy personal or family needs
Consumer Product (B2C)
sold to businesses to satisfy their needs or bought by a form to make into other products
Business Product (B2B)
The demand for consumer goods is a ‘direct demand’.
Consumer goods
The number of buyers is great.
Consumer goods
The buyers are found scattered in different parts of the country / world.
Consumer goods
Each purchase will generally be of small value.
consumer goods
Buying is much influenced by emotions.
consumer goods
The demand for business goods is a ‘derived demand’.
It is derived from the demand for consumer goods, which are made using the business goods.
business goods.
Business goods have only limited number of buyers.
business goods
The buyers are found to be concentrating in certain regions only.
business goods.
Each purchase involves a very high amount (in money terms).
business goods.
Buying cannot be influenced by emotions.
business goods.
After-sale service is important in the case of consumer durables.
consumer goods
There are a number of middlemen in the market.
consumer goods
A buyer of consumer goods may not have thorough knowledge of the goods he buys and uses.
consumer goods
The reputation of the seller or manufacturer may not always be given importance in buying consumer goods.
consumer goods
Inducements to the buyers in the form of cash discounts, free gifts, etc. are made always by those marketing consumer goods.
consumer goods
After-sale service is of paramount importance in the case of all business goods.
business goods
The manufacturers of industrial goods supply directly to their customers.
business goods
A buyer of industrial goods must have complete knowledge of the goods he buys and uses.
business goods
The reputation of the manufacturer is always important in buying industrial goods.
business goods
Such inducements may not be common in the marketing of industrial goods.
business goods
7 Stages in the Development of a Product
Strategy Development
Generation of Ideas
Screening and Evaluation
Business Analysis
Product Development
Market Testing
Commercialization
Businesses often decide on effective strategies prior to the creation of a new product.
Strategy development
The ideas or concepts in developing a new product may come from various sources and not only from the upper management itself.
Generation of Ideas
During this phase, the ideas thrown in become subject to a more rigorous analysis.
Other factors, such as profit projections, risks involved, and consumer feedback, are likewise taken into consideration.
- Business Analysis
All ideas generated must go through proper evaluation wherein their feasibility is being determined.
There are also ideas that do not resonate well with the core objectives of the business.
- Screening and Evaluation
It is during this stage that the product is introduced to the market.
The production department will be tasked to produce and deliver the product to various intermediaries, and the marketing department will be tasked to take care of the branding of the product.
- Product Development
Businesses adopt different approaches to testing the new product.
In most situations, test marketing involves the introduction of the new product to a small market.
If such launching were successful, then it would be introduced to larger market size.
Market Testing
If the outcome of the previous test marketing were successful, the business would introduce the product to a larger market, either locally or internationally.
Commercialization
represents the location where the buyer and seller exchange goods and services.
Place
a location in any business process where the aspects of management, product storage, logistics, processing of orders, and inventory control are being made available.
place
it is also called as the distribution channel.
place
it can include any physical store as well as virtual stores or online shops on the internet.
place
contains a set of interdependent organizations that are involved in the process of making a product or service available to the end consumers.
distribution channel
4 Types of Distribution Channels
Direct distribution
Indirect distribution
Dual or Hybrid distribution
Reverse channels
In this type of distribution channel, the manufacturer or producer directly distributes the product to the end consumer.
Direct distribution
manufacturer with inhouse warehousing and shop front
End-User ( Customer
Manufacturer. Products. Consumer
—»
Direct Distribution
Any business using an indirect distribution channel will always employ selling through an intermediary.
Generally, the business will sell its products to a wholesaler who further reaches out to a retailer to target more consumers.
indirect distribution
Producer — Retailers/Wholesaler/Agents — Consumer
Manufacturer — Products — Intermediary — Products — Customer
Indirect Distribution
The dual distribution channel involves a combination of direct and indirect selling strategies.
Businesses may opt to sell their products directly to the end consumers, and they may also reach out to several intermediaries at the same time.
Dual/hybrid distribution
Manufacturer — Products Customer
Manufacturer — Products — Intermediary — Products — Customer
Dual/hybrid distribution
The reverse channel has a different course—from the end consumer, next to the intermediary, down to the beneficiary or user
In this kind of distribution channel, the consumers will be using goods for recycling and repurposing.
Reverse channels
3 ways in reverse channel
Reuse
Recycle
Refurbish
containers, metallic equipment, drums, bottles
Reuse
paper, plastics, cardboards, cartons, aluminum cans, empty aerosols
recycle
computer parts and equipment, appliances, machines, electronics
refurbish
are the middlemen who play a vital role in the distribution of products to the market.
Intermediary
Types of Intermediary
Wholesaler
Retailer
Distributor
Agent
is engaged in the buying and handling of goods in bulk or large quantities, which are subsequently sold to retailers in various areas.
Wholesaler
Individuals engaged in retailing typically purchase goods at a low price, which are then resold to earn a profit.
Retailer
The primary role of a distributor is to obtain products from the manufacturer itself and distribute it to various retailers and other endpoint locations.
Distributor
The core service of an agent typically revolves around bringing buyers and sellers together towards a negotiation process.
In most cases, agents earn money through commissions and fees paid for their services.
Agent
3 Distribution Strategies
Intensive Distribution
Selective Distribution
Exclusive Distribution
In this kind of distribution strategy, products are distributed to as many retail outlets as possible.
Low-priced products such as gums, candies, and other basic supplies are oftentimes distributed using this approach.
Intensive distribution
Luxuries and other products that are upscale in nature are primarily distributed through selected channels.
- Selective distribution
When products are being sold to only one specific retailer, the exclusive distribution strategy is being employed.
With this strategy, the retailer has exclusive rights to sell the products of a business.
- Exclusive distribution
is a silent hero in the marketing world.
It refers to the outside appearance of a product and how it is presented to the customers.
can make or break the success and growth of a business, so it is important to innovate packaging that fulfills its essential functions.
The best packaging should be attractive enough and cost efficient for the customers.
packaging
The best packaging should be
attractive enough and cost efficient for the customers.
A great deal of making purchase decisions is allotted to color testing and psychological manipulation.
Some consumers are easily influenced by the external features of a product.
This is precisely the role of packaging in marketing—it can be used as a tool to encourage or persuade consumers to purchase a product.
packaging
A great deal of making purchase decisions is allotted to
color testing and psychological manipulation.
Five Basic Functions of Packaging
Protection
Containment
Information
Utility of use
Promotion
One of the major functions of packaging is to provide for the effects of time and environment for the natural and manufactured products.
protection
The protection function can be divided into some (4) classes:
Natural deterioration
Physical protection
Safety
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.
Small objects are typically grouped together in one package for reasons of convenience and efficiency.
For example, a single box of 100 pencils requires less physical handling than 100 single pencils.
containment
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
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, usage directions, ingredients, and storage instructions.
information
Companies use attractive colors, logos, symbols and captions to promote the product that can influence customer purchase decision.
promotion
5 packaging decision
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:
