Entrepreneurship notes

Lesson 4 – The Marketing Mix

Entrepreneurial work does not simply end there. You must design particular marketing
program or strategy that will deliver the value of your product to the target consumers. In
the parlance of entrepreneurship, this program is technically called the marketing mix.
The marketing mix – a mode, means, or tool used by the entrepreneurs to position the
product in the target market segment to efficiently deliver it to the consumers and to
convince them about the benefits that they will derive from buying the product.
The marketing mix is also known as the "Ps" in marketing. Originally, there were on 4Ps,
but the model has been continuously modified until there became 7P's. The combination of
these marketing methods or devices is known as the Marketing Mix.
Marketing manager – is a mixer of all marketing ingredients and he creates a mix of all the
marketing element and resources.
The marketing mix will naturally be changing environmental factors (technical, social,
economic, and political affecting each market).
Using a marketing mix offers an excellent way to ensure that the right product is put in the
right place. The marketing mix is a very important tool that helps businesses understand
what the product or service can provide and how successful marketing of the product can
be anchored on.
This mix is generally implemented through the 4P's of marketing:
1. Price
2. Product
3. Promotion
4. Place.
They serve as a wonderful place to commence planning for the launch and marketing of
new and existing products.

Importance of Marketing Mix in your Marketing Strategy –

The assessment of the roles of your product, promotion, price, and place plays a vital part
in your overall marketing approach. The mix helps in determining which marketing
strategy is right for your organization. It is the first step before you even create your
business or marketing plan. The reason is that your marketing mix decisions also have an
impact on your positioning, targeting, and segmentation decisions.
You can make the targeting and segmentation decisions based on your products while
positioning can be decided on the basis of your price. These decisions also have an impact
on the decision you make regarding the promotion and price.
Therefore, the marketing mix strategy goes hand in hand with positioning, targeting, and
segmentation.
All the elements, included in the marketing mix and the extended marketing mix, have an
interaction with one another. If you have a service or a product, then you will have to
decide on a price in order to sell it.

The Marketing Mix: The 7Ps of Marketing

The marketing mix is a widely accepted strategic marketing tool that combines the original
4Ps (product, place, price, promotion) with the additional 3Ps:
1. People,
2. Packaging
3. Process
These 7Ps are employed until the entrepreneur finds the right combination that will most
effectively serve the customer's needs and wants and at the same time achieve the
profitability objective. The 7Ps are controllable by the entrepreneur and therefore must be
well thought of to be successful. Prior to the 7Ps, the 4Ps were used in marketing products
or physical goods only.
1. Product - What product or service is the most appropriate for the opportunity, and
why will customers buy or avail them?
2. Place - What location is best suited for the business where there are more potential
customers?
3. Price - What is the most appropriate price, and what pricing strategies will be used
for the target customers?
4. Promotion - What is the most effective advertisement or combination of
advertisement, and which advertising tool should be used to drive awareness and
increase sales?
5. People - What type of people need to be hired?
6. Packaging - What is the best packaging for the product that is attractive enough to
customers and cost-efficient at the same time?
7. Processing - What is the most compelling feature of the product or the business that
will make a difference in the lives of the customers
Product – is any physical good, service, or idea that is created by an entrepreneur or an
innovator in serving the needs of the customer and addressing their existing problems. The
product or service should not be created before finding the right customer, because this is
very risky and the resources and time might be put to waste. The three-level concept of
products or service summarizes the reasons that a customer decides to buy a product or
avail of a service.
1. Core Benefits of the Product or Service – The core benefits of a product or service
are the major factor why a customer buys a product or avails of a service.

2. Physical Characteristics of the Product or Service – Once the core benefit has been
satisfied and options are available to the customers, the tendency is to look for the
second layer of section.

3. Augmented Benefits of a Product or Service – Augmented benefits are only

additional benefits a customer will still get the core benefits of a product or service
even without the augmented benefits.

Place – refers to a location or the medium of transaction. A strategic location depends on

the nature of the business and the primary target market. Place also covers the product
distribution and the whole business logistics. One of the major objectives of the
entrepreneur for place is to provide customers with pleasant experience in buying product.
Price – is the peso value that the entrepreneur assigns to a certain product or service after
considering its cost, competition, objectives, positioning, and target market. Here are the
most common pricing strategies.
1. Bundling - refers to two or more products or services in one reduced price.
2. Penetration pricing - this refers to setting low prices to increase market share.
3. Skimming - this is the opposite of penetration pricing where are initially high.
4. Competitive pricing - refers to benchmarking prices with the competitors.
5. Product line pricing - refers to pricing different products or services.
6. Psychological pricing - considers the psychology and positioning of price in the
market.
7. Premium pricing - refers to setting a very high price to reflect elitism.
8. Optional pricing - refers to adding an extra product or service on top.
9. Cost-based pricing - basis of markup is the cost of sales.
10. Cost plus pricing - markup is based on a certain percentage of cost.
Promotion - involves presenting the products or services the public and how these can
address the public's needs, wants, problems, or desires. Key marketing messages promotion
can be the following
1. Value proposition or unique selling proposition of the product or service
2. Product or service image
3. Business image
4. Business values and philosophy.
The entrepreneur can choose one or combination of the following promotional tools:
1. Advertising - (television, radio, internet, mobile phones, print, out of home)
Selling - act of trading a product or service for a price or a fee.
2. Sales promotions- (sales discounts, raffles, contest and games, promo items, product
or service bundles)
3. Public relations- (press conferences, launching events, strong media public relations
relations) through press kits, social responsibility events, lobbying, web public
relations)

People – is one of the three additional Ps in the marketing mix.

Packaging – is how the product or service is presented to customers. Packaging ultimate is
to entice customers to purchase the product or service.
Process – is the last addition in the marketing mix as marketers began to realize the
importance of the internal and external operations of the business to serve customers
better.