Marketing Mix: Price, Promotion & People

Price

• Price is the peso value that the entrepreneur assigns to a certain product or service
after considering its costs, competition, objectives, positioning, and target market. It is
the only P in the 7Ps that generates revenue for the business.
• Determines the value of a good or service to the buyers even to the sellers.

Five Steps in Developing a Pricing Strategy

1. Objective
2. Broad price policy
3. Price strategies
4. Implementing price strategy
5. Price adjustments
1. Objective
a. Sales Based – firm is interested in sales growth or maximizing market share.
b. Profit Based – firm is interested in maximizing profit, earning a satisfactory. Satisfy
the investors/stockholders by providing ROI.
c. Status Quo Based – maintain good image to the community by creating projects that
protect its welfare and goodwill.
2. Broad price policy
Links prices with the target market, image, and other marketing elements. It makes sure
that pricing decisions are coordinated from other sellers.
a. Penetration pricing – uses low prices to capture customers.
b. Skimming pricing – uses high prices to attract market segment which concerned
with product quality, status.
3. Price strategies
Ways or some actions to accomplish the goals and objectives of the company in gaining
profit.
Categories:
a. Cost-based price strategy – sets prices by computing costs, expenses
b. Demand-based price strategy – sets prices after researching consumer desires
c. Competition-based price strategy – sets prices in relation to the competitors
4. Implementing price strategy
Firm readiness to sell the product which would be effective if given an attractive price strategy.
a. Customary pricing – price is maintained over an extended period of time
b. Variable pricing – price responds to costs fluctuations or differences in demand.
c. One-price policy – set one price for all products available for sale even though they differ
from design
d. Flexible pricing – based on customer’s ability to negotiate or buy power of the customer
e. Odd pricing – uses odd numbers to attract customers
f. Price-quality association – instilled that having a high price contain high quality materials
g. Prestige pricing – follow the price floor and ceiling set by the government
h. Leader pricing – selling key items at low prices to gain consumer loyalty within its product
line.
i. Multiple-unit pricing – offer discounts to consumers for buying in large quantities
j. Price lining – sells two models of different quality and features at different prices
k. Price bundling – offers a basic product and service for one total price.
l. Unbundled pricing – sells by individual components and allows customer to decide what to
buy
m. Geographic pricing – prices are set depending on the distance of the buyer to the seller
n. Terms of payment – price agreements including discounts, timing of payments and credit
agreements
5. Price adjustments
Changes in cost, competitive conditions and consumer demand. It can be adjusted in
the list prices, escalator clauses, surcharge, mark ups, and markdowns.
Pricing Strategy - Factors to consider:

1. The customer’s perception of value of the kind of business firm.

2. The costs involved such as overhead, storage, financing, production, and distribution.
3. The profit objectives of the firm.
Factors that Influence Price Determination

• Internal organizational factors – marketing objectives, marketing mix strategy and

the cost-plus pricing strategy.
• External factors – market demand, competitors’ strategy and the economic and social
concerns.

Promotion

• Promotion involves presenting the products or services to the public and how these
can address the public’s needs, wants, problems, or desires. The major goal of
promotion is to gain attention.
• Any form of communication which is used to inform, persuade and remind people
about an organization or individual’s goods, services, image, ideas, community
involvement or impact on the society.

Promotional mix – combination of the strategies to accomplish the promotion

objectives of an organization.

Promotional Mix Tools – refer to the entire set of activities, which communicate
the products, brand or service to the user.

These are the following:

1. Advertising – paid, non-personal communication regarding goods, services,

organizations, people, places and ideas that is transmitted through various media by
business firms, government, etc. Paid form of communication.

Advertising and Promotions Strategy

1. Define the key product or company strengths

2. Define the means or media that will be used

3. Explain or justify what media was chosen to be the most cost-effective

2. Publicity/Public relations – non-personal communication regarding goods, services,

organizations, people, places and ideas that is transmitted through various media but
not paid by an identified sponsor.

3. Personal selling – involves oral communication with one or more prospective buyers
by paid representatives for the purpose of making sales.

4. Sales promotion – involves paid marketing communication activities that stimulate

consumer purchases and dealer effective.

The Selection of a Promotion Mix Depends on Several Variables:

1. Product Life Cycle
2. Company Characteristics
3. Relations with Middleman

Promotion Strategy

1. Advertising Aspects

a. Advertising budget
b. Positioning message
c. First year media schedule

2. Public Relations – detailed presentation of the publicity strategy of the firm

3. Sales promotion – means used to support the sales message like special sales,
coupons, contests, etc.

4. Personal sales – present the sales strategy which includes pricing procedures, rules
on returns and adjustments, etc.

People

• Can be considered as product by providing satisfaction to the consumer. These are

the celebrity, model, artist, dancer, singer and the like.

Business can improve their ability to attract, retain and improve productivity by
applying the following 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
Networking

It involves socioeconomic business activity by which entrepreneurs and businesspeople

meet to form business relationships to recognize, create, or act upon business
opportunities, share information and seek potential partners for business ventures.

The following tips can help someone to become successful in networking career:

1. Be humble and confident when healing with others.

2. Remember, both of you are important in the meeting
3. Make the first meeting successful, Remember first impression last.
4. Share information to create understanding.
5. Praise other people, avoid being arrogant.
6. Let other people share, do not monopolize a conversation.
7. Thank someone
8. Ask for referrals
9. Bring the best ideas, avoid talking nonsense or junk ideas
10. Be conscious in time, some people are busy

Network Marketing

• Founded the fastest way to accumulate wealth.

• The concept is used to penetrate the market as fast as possible without entailing
expensive marketing costs.
• Spread by word-of-mouth.

The marketing mix helps you define the marketing elements for successfully
positioning your market offer.