EMILIO AGUINALDO COLLEGE

Congressional East Avenue, Burol Main

City of Dasmariñas, Cavite

SENIOR HIGH SCHOOL DEPARTMENT

ENTREPRENEURSHIP
Quarter/School Year: 4th QUARTER / 2018-2019
Name:________________________________ Teacher: MR. JOHN EDUARD A. GRAJO
Section: G11 ___________________________ LESSON NUMBER 8

IMPORTANT NOTES: MARKETING MIX

 The marketing mix refers to the set of actions, or tactics, that a company uses to
MARKETING MIX promote its brand or product in the market.
It refers to the set of
 It is defined as set of marketing tools that the firm uses to pursue its marketing
actions, or tactics,
objective in the target market.
that a company uses to
 It is a foundation concept in marketing.
promote its brand or
product in the market.  Also known as the four (4) P’s broad levels of marketing decision namely Product,
Price, Place and Promotion.
ELEMENTS OF  In services marketing, a modified and expanded marketing mix is used, typically
MARKETING MIX comprising seven P’s made up of the original 4 P’s plus process, people, physical
(7 Ps) environment/evidence.

Product EMERGENCE OF THE MARKETING MIX:

Price THE 4PS AND 7PS CONCEPT
Place Professor JAMES CULLITON (1948)
Promotion • He is a professor of Marketing at Harvard University.
Process • He published an article entitled: The Management of Marketing Costs.
People • He describes marketers as ‘Mixers of Ingredients’.
Physical Evidence
Professor NEIL BORDEN (1948)
• He wrote a retrospective article giving the details of the early history of the 4Ps.
THE 4Ps AND 7Ps
CONCEPT • He credits himself with popularizing the term “Marketing Mix”.
• He consistently used the term from the late 1940s.
James Culliton
(Mixers of Ingredients) E. JEROME McCARTHY (1960)
 The 4Ps in its modern form was proposed in his text book entitled: Basic
Neil Borden Marketing: A Managerial Approach.
(Marketing Mix)
 He used the 4Ps as an organizing framework for the entire work.
E. Jerome McCarthy  It has been widely adopted.
(4Ps Marketing Product)
PHILIP KOTLER
Philip Kotler  He popularized the managerial approach and with it, spread the concept of
(Spreads the
4Ps.
Concept of 4Ps)
 Service marketers were thinking about the revision of the general marketing mix.
Booms and Bitner  Services were fundamentally different from products.
(Model of the 7Ps)
BOOMS and BITNER (1981)
 Modifying the marketing mix happened in the early 1980s.
 Proposed the model of the 7Ps.
PRODUCT  It is comprised of the original 4Ps plus Process, People, and Physical
A product is anything that Evidence.
can be offered for
satisfaction.
ELEMENTS OF MARKETING MIX
PRODUCT STRATEGIES (7 Ps)
1. Breadth Strategy 1. PRODUCT
2. Depth Strategy  Refers to what the business offers for sale and may include products
3. Tailored Strategy (goods) or services.
 A product is anything that can be offered for satisfaction.

Strategies for Mature Products

PRICE
It refers to the total cost
for customer to acquire the
product.
1. Develop new uses or functions and new purposes for products.
2. Develop new or add latest product features.
3. Find new classes of consumers or new potential markets for present products.
4. Find new classes of consumers for modified products.
5. Increase product use for new product users.
6. Change marketing policies or strategy.
 PRODUCT STRATEGIES
FIVE STEPS IN
DEVELOPING A PRICING 1. Breadth Strategy is reaching multiple segments with a single product.
STRATEGY 2. Depth Strategy is serving one segment with multiple products.
3. Tailored Strategy is customizing products for each segment.
1. Objective
2. Broad Price Policy 2. PRICE
3. Price Strategies  Refers to the total cost for customer to acquire the product.
4. Implementing Price  It may involve both monetary and psychological costs such as the time
Strategy and effort extended in acquisition.
5. Price Adjustments

OBJECTIVE STRATEGY FIVE STEPS IN DEVELOPING A PRICING STRATEGY

1. Sales-based
2. Profit-based 1. OBJECTIVE may be: sales-based, profit-based, and status-quo based.
3. Status Quo Sales Based: The firm is interested in sales growth.
Profit Based: The firm is interested in maximum profit.
BROAD PRICE POLICY Status Quo: The firm seeks to avoid reasonable government
1. Penetration Pricing actions, minimize the effects of competitor actions,
2. Skimming Pricing and maintain the good channel relations. The goal of
PRICE STRATEGY
the company is to maintain good image to the
a. Cost-based price community by creating projects/programs that protects
strategy its welfare and goodwill.
b. Demand-based price
strategy 2. Broad Price Policy provides procedures, rules, and methods to act in one
c. Competition-based specific situation.
price strategy a. Penetration pricing uses low prices to capture/attract the market
the larger/mass market for a product or service.
IMPLEMENTING PRICE b. Skimming pricing uses high prices to attract the market segment
STRATEGIES more concerned with product quality, uniqueness or status than
price.
a. Customary Pricing
b. Variable Pricing
c. One-Price Policy 3. PRICE STRATEGIES are ways or some actions to accomplish the goals
d. Flexible Pricing and objectives of the company in gaining profit.
e. Odd Pricing a. Cost-based price strategy It is when the firm sets prices by
f. Price Quality computing merchandise, services and overheads costs then
Association adding desired profit to those figures.
g. Prestige Pricing b. Demand-based price strategy It is when the firm sets prices after
h. Leader Pricing researching consumer desires and make sure the range of prices
i. Multiple Unit Pricing is acceptable to the target market.
j. Price Lining c. Competition-based price strategy It is when the firm sets prices
k. Price Bundling
l. Unbundled Pricing
in relation to the competitors.
m. Geographic Pricing
4. IMPLEMENTING PRICE STRATEGY is the firm readiness to sell the
TERMS OF PAYMENTS product which would be effective if the given an attractive price strategy
These are the price listed below:
agreements, including a. Customary pricing is when one price is maintained over an
discounts, timing of extended period of time.
payments and credits b. Variable pricing is when the price responds to costs fluctuations
agreements. or differences in demand.
c. One-price policy is when the price is charge to all customers
Discounts:
 Paying in cash
buying the product or service under similar conditions.
 Performing d. Flexible pricing is based on customer’s ability to negotiate or buy
certain functions power of the customer.
 Buying large e. Odd pricing are prices set at levels below even values.
quantity f. Price-quality association is when the customers believed that
 Off-season high price represents high quality and low prices represent low
buying qualities.
g. Prestige pricing is when customers set price floors and will not
PRICE ADJUSTMENTS buy at prices below those floors.
This refers in changes h. Leader pricing is selling key items at low prices to gain consumer
in cost, competitive loyalty within its product line.
conditions and demand i. Multiple-unit pricing is when the entrepreneur offers discounts to
require changes in consumers for buying in large quantities.
price j. Price lining is when instead of setting one price for a single model
of a good or service, the firm sells two models of different quality
A. List Prices
B. Escalator
and features at different prices.
Clauses k. Price bundling is when the firm offers a basic product, options
and customer service for one total price.
 l. Unbundled pricing is when the firm sells by individual
C. Surcharge components and allows customer to decide what to buy.
D. Mark-ups m. Geographic pricing is when the prices are set depending on the
E. Markdowns distance of the buyer to the seller.

TERMS OF PAYMENTS These are the price agreements, including discounts,

timing of payments and credits agreements.

Discounts:
PLACE
 Paying in cash
This is the place where
your customers buy your
 Performing certain functions
product and how you  Buying large quantity
make it available to them  Off-season buying
to view and evaluate it.

A. Direct Channel 5. PRICE ADJUSTMENTS –This refers in changes in cost, competitive

B. Indirect Channel conditions and demand require changes in price.
A. List Prices These are regularly quoted prices to customers, as in
INTENSITY OF catalogs, price tags and purchase orders.
CHANNEL COVERAGE B. Escalator Clauses This happens when the contract which allows
1. Exclusive distribution
2. Selective Distribution
price increase after the sale is concluded before the delivery is made.
3. Intensive Distribution C. Surcharge It is the supplementary to list prices. These are
additional charges added to the total prices.
D. Mark-Ups It is when the company is raising regular selling prices
because demand is unexpectedly high, or costs are raising.
E. Markdowns These are the reductions from original prices to meet
PROMOTION lower prices of competitors and overstocking.
Refers to “the marketing
communication used to 3. PLACE
make the offer known to
 This is the place where your customers buy your product and how
potential customers and
persuade them to you make it available to them to view and evaluate it.
investigate it further”.  It is defined as the “direct or indirect channels to market,
geographical distribution, territorial coverage, retail outlet, market
PROMOTION location, catalogues, inventory, logistics and order fulfillment.
ELEMENTS  Place refers to either Physical location or Virtual Stores.
1. Advertising
2. Public Relations A. Direct channel distribution is the transfer or movement of goods and
3. Direct Selling services from manufacturer to final user or customer without the intervention
4. Sales Promotions
of independent middlemen.
PROMOTIONAL B. Indirect channel distribution is the transfer or movement of goods and
OBJECTIVES tangible products and services or intangible goods from manufacturer or
1. Advertising producer to independent intermediaries.
2. Publicity
3. Personal Selling INTENSITY OF CHANNEL COVERAGE
4. Sales Promotion 1. Exclusive Distribution is the limited number of middlemen used in geographic
area.
2. Selective Distribution is organizing a moderate number of wholesalers or
retailers.
PEOPLE
3. Intensive Distribution is organizing a large number of middlemen that are used
It can be considered as to obtain widespread market coverage and channel acceptance.
product by providing
satisfaction to the 4. PROMOTION
consumer.  Refers to “the marketing communication used to make the offer
known to potential customers and persuade them to investigate
P-R-I-D-E it further”.
 Promotion elements include “advertising, public relations, direct
selling and sales promotions.

PROCESS Promotional Mix is a combination of the strategies to accomplish the promotion

It refers to a set of
activities that results in
delivery of the product
benefits.
objectives of an organization.
These are the following:
1. Advertising is a paid, non-personal communication regarding goods,
services, organizations, people, places and ideas that is transmitted through
various media.
2. Publicity is a non-personal communication regarding goods, services,
organizations, people, places and ideas that is transmitted through various
media but not paid for by an identified sponsor.
 3.
4.
PHYSICAL EVIDENCE
It is the lasting proof that
the service has
happened, in terms
of buying a physical
product, the physical
evidence is the product
itself.
PHYSICAL EVIDENCE
It is the lasting proof that
the service has
happened, in terms of
buying a physical
product, the physical
evidence is the product
itself.
Reference:
Entrepreneurship, Unlimited Books Library Services and Publishing Inc.,Marife
Agustin-Acierto.:pages 189-230
Personal selling involves oral communications with one or more prospective
buyers by paid representatives for the purpose of making sales.
Sales Promotion involves paid marketing communication activities that
stimulate consumer purchases and dealer effective.
5. PEOPLE
 It can be considered as product by providing satisfaction to the
consumer.
Business can improve their ability to attract, retain and improve the
productivity by applying the five-step PRIDE process.
P Provide a Pleasant Working Environment
R Recognize, Reward and Reinforce the Good Behavior
I Involve and Participate in the activities and programs
D Develop skills and Attitude
E Evaluate and Measure Performance
6. PROCESS
 It refers to a set of activities that results in delivery of the product
benefits.
 Could be a sequential order of tasks that an employee undertakes
as a part of their job.
7. PHYSICAL EVIDENCE
 The lasting proof that the service has happened, in terms of buying
a physical product, the physical evidence is the product itself.
 It is important to customers because the tangible goods are
evidence that the seller has (or has not) provided what the
customer was expecting.