CHAPTER FOUR: MARKETING

CHAPTER FOUR: MARKETING

LESSON 2. The 7Ps of Marketing

The 7 Ps marketing mix is a marketing tool and strategy that will help your business to develop its marketing and business
success by focusing on specific areas. Historically, the marketing mix elements comprised of the 4Ps of product, price, place and
promotion. The 4Ps strategy was originally masterminded up by E. Jerome McCarthy in 1960. In 1981, Booms and Bitner extended
the marketing mix by 3 new Ps that directly relate to the service provision industry. These new elements are people, physical evidence
and process. Essentially Marketing Mix is about putting the ‘Right Product’ in the ‘Right Place’, at the ‘Right Time’, at the ‘Right
Price’ to attract your target customers. (www.multiliteraciesproject.com)

These 7 Ps are predominantly used by businesses as a focal point and as part of an overall marketing strategy.
They can assist with:
 Defining areas of success in the business that can be replicated and built on
 Defining issues in the business that are holding you back from being more profitable, productive or successful
 Setting objectives and targets – so you can move strategically towards your goals
 Competitive analysis – your business position in the market against your competitors
 SWOT analysis – analysis of your business strengths, weaknesses, opportunities and threats
(https://economictimes.indiatimes.com/definition/marketing-mix)

The 7 Ps of Marketing Mix

1. PRODUCT
The first P in the Marketing Mix is the Product. Marketing strategy typically starts with the product. Marketers can’t plan a
distribution system or set a price if they don’t know exactly what the product will be offered to the market.
Product refers to the goods and services offered by the organization. A pair of shoes, a plate of dahi-vada, a lipstick, all are
products. All these are purchased because they satisfy one or more of our needs. We are paying not for the tangible product but for the
benefit it will provide. So, in simple words, product can be described as a bundle of benefits which a marketeer offers to the consumer
for a price. While buying a pair of shoes, we are actually buying comfort for our feet, while buying a lipstick we are actually paying
for beauty because lipstick is likely to make us look good. Product can also take the form of a service like an air travel,
telecommunication, etc. Thus, the term product refers to goods and services offered by the organization for sale.

PRODUCT CLASSIFICATION
Product can be broadly classified on the basis of (1) use, (2) durability, and (3) tangibility. Let us have a brief idea about the
various categories and their exact nature under each head, noting at the same time that in marketing the terms ‘product’ and ‘goods’
are often used interchangeably.

1. Based on use, the product can be classified as: (a) Consumer Goods; and (b) Industrial Goods.
(a) Consumer goods: Goods meant for personal non-business use or consumption by the households or ultimate consumers are
called consumer goods. This includes items like toiletries, groceries, clothes etc. Based on consumers’ buying behavior the
consumer goods can be further classified as: (i) Convenience Goods; (ii) Shopping Goods; and (iii) Speciality Goods.
(i) Convenience Goods: A class of consumer goods that people buy frequently with the least possible time and effort
are called 'convenience goods'. These are the products the consumers want to purchase frequently, immediately,
and with minimum effort. Milk, bread, butter, eggs, soap, newspaper, biscuits, toothpastes, etc., are some
examples of convenience goods. This category of goods has a low unit price, and not greatly affected by fad and
fashion. They have two significant characteristics: 1) the consumer has complete knowledge of the products which
he wants to buy and 2) the product is purchased with a minimum of effort. Convenience goods are usually sold by
brand name and are low-priced. Many of them such as bread, milk and edible oil, are staple items, and the supply
must be constantly replenished. In most cases, the buyer has already decided to buy a particular brand at a
particular store and spends little time deliberating about the purchase decision. So convenience goods must be
readily available when the consumer demand arises. To ensure this, the manufacturer must secure wide
distribution.

The consumers rarely visit competing stores to compare prices and quality while purchasing convenience goods.
The possible gains from such comparisons are outweighed by the costs of acquiring the additional information. This
does not mean, however, that the consumer remains permanently loyal to one brand or cigarette, or soap or biscuit.
A consumer is willing to accept any of several brands and thus, will buy the brand that is most accessible. Since the
price of most convenience goods is low, trial purchases of competing brands or products are made with little
financial risk, and often new habits are developed.

1 ENTREPRENEURSHIP
 CHAPTER FOUR: MARKETING
Retailers usually carry several competing brands of convenience products and are not able to promote any particular
brand. Therefore, the promotional burden to develop consumer acceptance for the products falls on the
manufacturer.

(ii) Shopping Goods: These are a class of consumer goods that are purchased only after the buyer has spent some
time and effort comparing price, quality, style, color, etc., of alternative products in competing stares. The
purchaser of shopping goods lacks complete information prior to the shopping trip and gathers information during
it. For instance, a woman intending to buy a new dress may visit many stores, try on a number of dresses, and
spend time making the final choice. She may go from store to store in surveying competing offerings and
ultimately select the dress that appeals the most to her. In addition to women's apparel shopping goods include
such items as jewelry, furniture, appliances, shoes, etc. It is important to place the shopping goods in stores
located near other stores carrying competing items, as it facilitates the customers to compare the product.
Shopping goods are typically more expensive than convenience goods.

Some shopping goods, such as children's shoes, are considered homogeneous i.e., the consumer views them as
essentially the same. Others such as furniture and clothing are considered heterogeneous i.e., essentially different.
Price is an important factor in the purchase of homogeneous shopping goods, while quality and style are relatively
more important in the purchase of heterogeneous goods.

(iii) Speciality Goods: A class of consumer goods with perceived unique characteristics, such that consumers are
willing to spend special effort to buy them, are known as Speciality Goods. The buyer of speciality goods is well
aware of what he or she wants and is willing to make a special effort to obtain it. The nearest camera dealer may
be twenty miles away, but the camera enthusiast will go there to inspect and buy that camera. To purchase a smart
TV a person in a village may require a special trip to a nearby city which is several miles away. Still he will go
there, spend his time in inspecting several brands and finally buy a set of his own choice. Examples of some of the
speciality goods are photographic equiptments, TV sets, video players, mobile phones, automobiles, etc.

Speciality goods possess unique characteristics that cause the buyer to prefer that particular brand. For these
products the buyer possesses complete information prior to the shopping trip and is unwilling to accept
substitutes. Speciality goods are typically high-priced and are always branded. Since consumers are willing to
exert, considerable effort to obtain them, fewer retail outlets are needed. Since brand is important, the
manufacturers of speciality goods advertise extensively.

This three-way classification of consumer goods allows the marketing manager to gain additional information for
developing an effective marketing strategy for the product. For instance, once the new food product has been
classified as convenience product, you gain insight about marketing strategies in branding, promoting, pricing
and distribution methods.

(b) Industrial Goods: Goods meant for consumption or use as inputs in production of other products or provision of some
service are termed as ‘industrial goods’. These are meant for non-personal and commercial use and include (a) raw
materials, (b) machinery, (c) components, and (d) operating supplies (such as lubricants, stationery etc). The buyers of
industrial goods are supposed to be knowledgeable, cost conscious and rational in their purchase and therefore, the
marketeers follow different pricing, distribution and promotional strategies for their sale.
It may be noted that the same product may be classified as consumer goods as well as industrial goods depending
upon its end use. Take for example the case of coconut oil. When it is used as hair oil or cooking oil, it is treated as consumer
goods and when used for manufacturing a bath soap it is termed as industrial goods. However, the way these products are
marketed to these two groups are very different because purchase by industrial buyer is usually large in quantity and bought
either directly from the manufacturer or the local distributor.
i. Raw Materials –This category of industrial goods have not been processed except for their physical handling.
products which will become a part of another final product. Raw materials may be divided into natural
products- minerals and product of the forests and the seas and agricultural products- wheat, cotton, tobacco and
animal products such as eggs and raw milk.
Examples: Flour for making bread, eggs for processing milk

ii. Fabricating Materials and Parts - This category of industrial goods also will become a part of another final
product but are identifiable in finished form. Unlike raw materials, fabricating materials and parts have already
been processed, to some extent, but may need further processing before actual use.
Examples: The motors that go into lawn mowers, steering wheels on new cars are carefully
assembled when they arrive at the manufacturing plant, sparkplugs and fan belts in automobiles,
buttons on dresses

iii. Installations - Refers to major pieces of equipment used in the manufacture of other goods. This category
would include the physical plant (boilers, lathes, blast furnaces, elevators, and conveyor systems).
Example: Adding three presser machines for tin can industry

iv. Accessory Equipment - They are used to facilitate or aid in the production of the industrial market. It will not
be part of any final production nor gives significant effort in production scale.
Examples: Calculators for auditing firms, cash register for food chain outlets

v. Operating Supplies - Are the convenience goods of industrial market. They aid in the firm's operations without
becoming part of the end product.
2 ENTREPRENEURSHIP
 CHAPTER FOUR: MARKETING
Examples: Pencils, pens, typewriting paper, lubricating oil, stationery, etc.

2. Based on Durability, the products can be classified as : (a) Durable Goods; and (b) Non-durable Goods.
a) Durable Goods : Durable goods are products which are used for a long period i.e., for months or years together. Examples of
such goods are refrigerator, car, washing machine etc. Such goods generally require more of personal selling efforts and have
high profit margins. In case of these goods, seller’s reputation and presale and after-sale service are important determinants of
purchase decision.
b) Non-durable Goods: Non-durable goods are products that are normally consumed in one go or last for a few uses. Examples
of such products are soap, salt, pickles, sauce etc. These items are consumed quickly and we purchase these goods more
often. Such items are generally made available by the producer through large number of convenient retail outlets. Profit
margins on such items are usually kept low and heavy advertising is done to attract people towards their trial and use.

3. Based on tangibility, the products can be classified as: (a) Tangible Goods; and (b) Intangible Goods.
a) Tangible Goods: Most goods, whether these are consumer goods or industrial goods and whether these are durable or non-
durable, fall in this category as they have a physical form, that can be touched and seen. Thus, all items like groceries, cars,
raw-materials, machinery etc. fall in the category of tangible goods.
b) Intangible Goods: Intangible goods refer to services provided to the individual consumers or to the organizational buyers
(industrial, commercial, institutional, government etc.). Services are essentially intangible activities which provide want or
need satisfaction. Medical treatment, postal, banking and insurance services etc., all fall in this category.

2. PLACE
Place is the second P in the Marketing Mix. Place represents the location where the buyer and seller exchange goods or
services. It is also called as the distribution channel. It can include any physical store as well as virtual stores or online shops on the
Internet.
Primarily a channel of distribution performs the following functions:
a) It helps in establishing a regular contact with the customers and provides them the necessary information relating to
the goods.
b) It provides the facility for inspection of goods by the consumers at convenient points to make their choice.
c) It facilitates the transfer of ownership as well as the delivery of goods.
d) It helps in financing by giving credit facility.
e) It assists the provision of after sales services, if necessary.
f) It assumes all risks connected with the carrying out the distribution function.
Place matters for a business of any size. It is a crucial part of the marketing mix. The main function of a distribution channel is
to provide a link between production and consumption.

TYPES / STAGES OF DISTRIBUTION CHANNEL

a) Zero stage or level channel of distribution /Direct Channel / Direct
Marketing exists where there is direct sale of goods by the producer to
the consumer. This direct contact with the consumer can be made through
door-to-door salesmen, own retail outlets or even through direct mail.
Also in case of perishable products and certain technical household
products, door-to-door sale is an easier way of convincing consumer to
make a purchase. Example: Mail order selling, Internet selling, Selling
through own sales force/ own retail outlets ( eg. Bata, McDonald, Eureka
Forbes etc.)

b) One stage or level channel of distribution - In this case, there

is one middleman i.e., the retailer. The manufacturers sell their
goods to retailers who in turn sell it to the consumers. This type
of distribution channel is preferred by manufacturers of
consumer durables like refrigerator, air conditioner, washing
machine, etc. where individual purchase involves large amount.
It is also used for distribution through large scale retailers such
as departmental stores (Big Bazaar, Spensors) and
supermarkets.

c) Two stage channel of distribution - This is the most

commonly used channel of distribution for the sale of
consumer goods. In this case, there are two middlemen
used, namely, wholesaler and retailer. This is applicable
to products where markets are spread over a large area,
value of individual purchase is small and the frequency of
purchase is high. This is the most commonly adopted
distribution network for most consumer goods like soaps, oils, clothes, rice, sugar, etc.

d) Three stage channel of distribution -

This is the longest Channel of
distribution. When the number of
wholesalers used is large and they are
scattered throughout the country, the

3 ENTREPRENEURSHIP
 CHAPTER FOUR: MARKETING
manufacturers often use the services of mercantile agents who act as a link between the producer and the wholesaler. They are
also known as distributors.

FACTORS AFFECTING THE CHOICE OF DISTRIBUTION CHANNEL

Choice of an appropriate distribution channel is very important as the pricing as well as promotion strategy are dependent upon the
distribution channel selected. Not only that, the route which the product follows in its journey from the manufacturer to the consumer
also involves certain costs. This in turn, affects not only the price of the product but also the profits. Choice of inappropriate channels
of distribution may result in lesser profits for the manufacturer and higher price from the consumer. Hence, the manufacturer has to be
careful while finalizing the channel of distribution to be used. He should pay attention to the following factors while making his
choice.

Nature of Market: There are many aspects of market which determine the choice of channel of distribution. Say for example, where
the number of buyers is limited, they are concentrated at few locations and their individual purchases are large as is the case with
industrial buyers, direct sale may be the most preferred choice. But in case where number of buyers is large with small individual
purchase and they are scattered, then need may arise for use of middlemen.

Nature of Product: Nature of the product considerably affects the choice of channel of distribution. In case the product is of technical
nature involving a good amount of pre-sale and after sale services, the sale is generally done through retailers without involving the
wholesalers. But in most of the consumer goods having small value, bought frequently in small quantities, a long channel involving
agents, wholesalers and retailers is used as the goods need to be stored at convenient locations. Items like toiletries, groceries, etc. fall
in this category. As against this in case of items like industrial machinery, having large value and involving specialized technical
service and long negotiation period, direct sale is preferred.

Nature of the Company: A firm having enough financial resources can afford to its own a distribution force and retail outlet, both.
But most business firms prefer not to create their own distribution channel and concentrate on manufacturing. The firms who wish to
control the distribution network prefer a shorter channel.

Middlemen Consideration: If right kind of middlemen having the necessary experience, contacts, financial strength and integrity are
available, their use is preferred as they can ensure success of newly introduced products. Cost factors also have to be kept in view as
all middlemen add their own margin of profit to the price of the products. But from experience it is learnt that where the volume of
sales are adequate, the use of middlemen is often found economical and less cumbersome as against directsale.

3. PRICE
The third P in the Marketing Mix is price. The price is a serious component of the marketing mix. What do you think is the
meaning of Price?
In the narrowest sense, price is the value of money in exchange for a product or service. Generally speaking, the price is the
amount or value that a customer gives up to enjoy the benefits of having or using a product or service. Thus, customers exchange a
certain value for having or using the product – a value we call price. Pricing (determination of price to be charged) is another
important element of marketing mix and it plays a crucial role in the success of a product in the market. If the price fixed is high, it is
likely to have an adverse effect on the sales volume. If, on the other hand, it is too low, it will adversely affect the profitability. Hence,
it has to be fixed after taking various aspects into consideration. The factors usually taken into account while determining the price of
a product can be broadly described as follows:
a) Cost: No business can survive unless it covers its cost of production and distribution. In large number of products, the retail
prices are determined by adding a reasonable profit margin to the cost. Higher the cost, higher is likely to be the price, lower
the cost lower the price.
b) Demand: Demand also affects the price in a big way. When there is limited supply of a product and the demand is high,
people buy even if high prices are charged by the producer. But how high the price would be is dependent upon prospective
buyers’ capacity and willingness to pay and their preference for the product. In this context, price elasticity, i.e.
responsiveness of demand to changes in price should also be kept in view.
c) Competition: The price charged by the competitor for similar product is an important determinant of price. A marketeer
would not like to charge a price higher than the competitor for fear of losing customers. Also, he may avoid charging a price
lower than the competitor. Because it may result in price war which we have recently seen in the case of soft drinks, washing
powder, mobile phone etc.
d) Marketing Objectives: A firm may have different marketing objectives such as maximization of profit, maximization of
sales, bigger market share, survival in the market and so on. The prices have to be determined accordingly. For example, if
the objective is to maximize sales or have a bigger market share, a low price will be fixed. Recently one brand of washing
powder slashed its prices to half, to grab a bigger share of then market.
e) Government Regulation: Prices of some essential products are regulated by the government under the Essential
Commodities Act. For example, prior to liberalization of the economy, cement and steel prices were decided by the
government. Hence, it is essential that the existing statutory limits, if any, are also kept in view while determining the prices
of products by the producer.
With product, promotion, and place of marketing mix, it is one of the business variables over which organizations can exercise
some degree of control. One example of a pricing strategy is the penetration pricing. It is when the price charged for products and
services is set artificially low in order to gain market share. Once this is attained, the price can be higher than before. For example, if
you are going to open a Beauty Salon, you need to set your prices lower than those of your competitors so that you can penetrate the
market. If you already have a good number of market share then you can slowly increase your price.
There are several factors that affect a small business’ revenue potential. One of the most important is the pricing strategy
utilized by you as the owner of the business. A right pricing strategy helps you define the particular price at which you can maximize
profits on sales of your product or service. You need to consider a wide range of factors when setting prices of your offerings. The
different pricing strategies with its definition can be found in the table below.

4 ENTREPRENEURSHIP
 CHAPTER FOUR: MARKETING
The Different Pricing Strategies and Its Definition
Pricing Strategies Definition
Penetration Pricing 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.
Skimming 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.
Competition A pricing method in which a seller uses prices of competing products as a benchmark instead of considering
Pricing 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
Product Line The practice of reviewing and setting prices for multiple products that a company offers in coordination
Pricing with one another. Rather than looking at each product separately and setting its price, product-line pricing
strategies aim to maximize the sales of different products by creating more complementary, rather than
competitive, products. If you offer more than one product or service, consider the impact that one product's
or service's price will have on the others.
Bundle 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.
Premium 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.
Psychological Psychological pricing is the practice of setting prices slightly lower than rounded numbers, in the belief that
Pricing 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.
Optional The company earns more through cross-selling products along with a basic core product. The main product
Pricing 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.
Cost Plus Cost plus pricing involves adding a markup to the cost of goods and services to arrive at a selling price.
Pricing 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 Based A pricing method in which a fixed sum or a percentage of the total cost is added (as income or profit) to the
Pricing cost of the product to arrive at its selling price.
Value Based A price-setting strategy where prices are set primarily on consumers' perceived value of the product or
Pricing service.

4. PROMOTION
Promotion is the fourth P in the Marketing Mix. Promotion refers to the complete set of activities, which communicate the
product, brand or service to the user. The idea is to create an awareness, attract and induce the consumers to buy the product, in
preference over others. The following are the most common medium in promoting a
product and this is called promotional mix.

PROMOTIONAL MIX / ELEMENTS

1. ADVERTISING
Advertising is the most well-known and widespread promotional element and an efficient method to reach a large number of
people. You can use advertising to: create awareness of a new product or service, describe its features, suggest usage situations,
differentiate it from competitor’s offers, induce consumers to buy it, create or enhance its brand image, etc. Because you pay for the
ads you have some control over what you want the message to be as well as to whom it is sent and when and how often this is done.
However, advertising is relatively expensive, and due to its non-personal nature, it is difficult to get feedback, know how your
message is received or close a sale.

The message (what you want to communicate) and the medium (how you get your message across) constitute the two basic
aspects of advertising. Communication channels used in advertising encompass:
 Television: features both audio and visual capabilities and the advantage of communicating information about your product
or service with a combination of sound, color and motion. The major disadvantages of television are its cost and the
likelihood of “wasted coverage” (people outside your target audience that see your ad). However, advertising on cable and
direct broadcast channels can be effective and often less expensive than using the major networks.
 Radio: has only audio capabilities to deliver your message but provides constant and flexible coverage to a wide range of
audiences with the possibility for you to choose the time, day and station to reach your target audience. The major advantages
of radio are its low cost and the ability to target specific local audiences. Important disadvantages are the short exposure time
and its limited use with products that need to be seen.
 Magazines: constitute a very effective way to deliver advertising messages to specific audiences thanks to the amazing
number of magazines currently in circulation covering almost any special interest. The most important advantages of this
medium are that they can reach narrowly defined segments and that ads can be very colorful and strategically located for
maximum visibility. The major disadvantages relate to the cost and the low frequency of publication, with weekly issues at
best.
 Newspapers: are a very good for running short-term promotions and for coupon offers in specific geographic regions. They
are an important local medium with excellent reach potential often used by local retailers as their only advertising medium.
Their main disadvantage is that they are usually limited to ads that call for customers’ immediate response. Increasingly,
newspapers are becoming available through the Internet which makes up for a decreasing trend in circulation of the printed
version.

5 ENTREPRENEURSHIP
 CHAPTER FOUR: MARKETING
 Direct mail: allows you to send your promotional information to very specific segments with customized messages that
convey detailed information about your product or service and its usage and benefits. It can be very effective if it is properly
planned. Its main disadvantage is it has a poor image (junk mail).
 Signage: includes billboards, service stations, signs in farmer’s markets, shelf talkers and POPs (point of purchase materials)
in supermarkets, etc. Outdoor advertising is a very effective medium for reminding customers about a product or service.
Billboards, the most common form of outdoor advertising, have good reach and frequency and have been shown to increase
purchase rates. The main advantage of signage is that it is one of the lowest in cost. Its main disadvantage is that messages
must be short and highly colored to be easily noticeable and effective. In addition, in many areas environmental laws have
limited the use of billboards.
 Yellow Pages: help consumers find out where they can get the product or service after other media have created awareness
and demand for them. Its advantages include availability (365 days per year 24 hours a day) and the possibility of placing ads
in different sizes and in several sections. The main disadvantages are the proliferation of directories and their lack of
timeliness as they are only updated once a year.
 Internet: is the fastest growing advertising media to which most consumers turn for initial or additional information. Like
print advertising it offers the possibility of visual messages but, in addition, it has audio and video capabilities and has the
unique feature of being interactive. Its main disadvantages are that it requires a certain level of technological skills from
consumers and is only available to those who have Internet access, limiting its reach.
 Classified ads: are available in magazines and newspapers, they are less expensive than traditional ads and can contain more
information. Small businesses often use this as their only medium to promote their products or services.

2. PERSONAL SELLING
Personal selling is the second major promotional strategy and usually involves a face-to-face communication between the
seller and the buyer to “close the sale”. Under the “push” promotional strategy, the role of the sales force is to encourage
intermediaries to buy the product. Under the “pull” strategy their role is to provide support and after-sales service to retailers.
The key advantages of personal selling include: a high level of persuasiveness, opportunities to customize the promotional
message, getting immediate feedback, the possibility of selecting the audience while delivering complex information. The main
disadvantages are relatively high cost per contact (in the form of salaries and sales incentives paid to sales representatives) as well as
the variability of the message delivered by the sales representatives.

3. PUBLIC RELATIONS & PUBLICITY

Public relations and publicity relates to the planned and sustained efforts of a firm to establish and maintain a favorable
public image and generate publicity aimed at a broad public audience (employees, past and present customers, shareholders, financial
institutions, the media, politicians, the general public, etc.). Publicity is basically a non-personal, unpaid presentation of a firm,
product or service.
Strategies you can use to develop the desired publicity include writing press releases. Press releases can inform the public
about your firm, your products and/or services, new products, a milestone in your firm’s history, an award you have won or a special
event. Production of promotional brochures and videos, holding consumer exhibitions, celebrity endorsements and websites are other
options to developing publicity. Other activities that firms typically engage in to generate publicity include: co-sponsoring local
sports, community and charity events, donating prizes or time to local fund-raisers, offering internships to students in the community,
and joining and giving lectures to local trade organizations or chambers of commerce
The main advantage of publicity is that being an unpaid way of communication it is one of the most credible information
sources, of particular importance for small businesses. The downside of publicity is that firms incur expenses and have little or no
control over the outcome.

4. SALES PROMOTIONS
Sales promotion refers to the provision of incentives to the end consumer (pull strategy) or to intermediaries (push strategy)
to stimulate demand for a product. It is normally used in combination with either advertising or personal selling.
Consumer sales promotions include price promotions (also known as “price discounting”), coupons, gift with purchase,
samples, contests, sweepstakes, money refunds (or rebates), frequent shoppers or loyalty incentives and Point of Purchase (PoP)
displays. Trade-oriented sales promotions are geared to supporting a firm’s advertising and personal selling efforts. Typical trade
promotional tools include allowances and discounts, cooperative advertising and
training of distributors’ sales force.
The main advantage of sales promotions is their effectiveness at stimulating sales during the duration of the offer. The
disadvantages are that sales go down as soon as the deal ends and that effectiveness tends to dissipate over time if used continuously.

Sales Promotional Tools

 Price Promotions, Price Discounts or Deals: short-term price reductions commonly used to increase trial use among
potential consumers or to retaliate against competitors’ actions.
 Coupons: usually offer a discounted price to the consumer to encourage trial use for a product or service. Most coupons have
an expiration date and the rate of redemption is very low - typically around 2%.
 Gift with Purchase or Premiums: often considered to be self-liquidating because the price charged to consumer covers the
price of the item. The firm’s objective with this type of promotion is to encourage costumers to buy more frequently or to
purchase more of the product.
 Samples or Sampling: consists of offering the product for free or at a significantly discounted price. It is often used for new
products in a trial size that is usually smaller than the regular package size. The expectation is that, if consumers like the
sample, they will remember the product and make future purchases.
 Contests: induce consumers to use their skills or creative and analytical abilities to win a prize. This tool can increase
consumers’ involvement with the product.

6 ENTREPRENEURSHIP
 CHAPTER FOUR: MARKETING
 Sweepstakes: require participants to submit some sort of contest entry but normally require no additional effort on their part.
The advantages are that it gets consumers to use the product and store it more often, which minimizes brand switching. The
disadvantage is that sales drop as soon as the sweepstakes end.
 Money refunds (or rebates): offers reimbursement of money based on submission of proof of purchase. It is heavily used on
high-ticket items facing intense competition (such as cars). In low-ticket items, the hassle and cost of mailing in the proof of
purchase tend to prevent consumers from taking advantage of this promotion.
 Frequent shopper or loyalty incentives: are used to encourage and reward repeat purchases by acknowledging each
purchase made by a consumer and offering a premium as purchases accumulate. They are effective in creating loyalty but
come at a high cost to a firm.
 Point of Purchase Displays: take the form of advertising signs. They can actually hold or display the product and are often
located in high-traffic areas in a store, near the cash register or at the end of an aisle to maximize the possibility of capturing
consumer’s attention. They are very effective in increasing product visibility and in generating impulse sales.
 Free Gifts
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 Samples
Providing free samples is 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 Trial
A free trial is 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.
 Customer Contests
Contests offer the customer a chance to win prizes like cash or store merchandise.
 Special Pricing
Special pricing is 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.

5. DIRECT MARKETING
Direct marketing is one of the fastest growing marketing strategies. It is based on the establishment of a direct relationship
between a firm offering a product or service and the end consumer, with the goal of making a sale on the spot and eliminating the
middleman. Because of the direct link between producer and end consumer direct marketing allows firms to be more effective in
targeting their market, getting higher response rates, generating repeat sales and competing. The major disadvantages of direct
marketing are the cost of some mediums, the need for comprehensive and up-to-date databases and the risks of violating data-
protection and electronic communication laws. The tools used in direct marketing include: direct mail, leaflet drops and handouts,
telemarketing, direct response advertising, email marketing, online marketing and SMS/Text marketing.
 Direct mail: the most widespread among this category of promotional tools. It allows firms to get information about their
products or services directly into the hands of those consumers who might be interested in them. The main disadvantage is its
image as “junk mail”.
 Leaflet drops and handouts: are probably the simplest and cheapest tools for direct marketing, but their response rate is
significantly lower than direct mail.
 Telemarketing: contacting consumers by phone is advantageous in that it is possible to gauge the customer’s interest
immediately, ask questions to assess their needs and explain technical features or complex messages more effectively. The
main disadvantage however, is that many people find these calls an undesirable interruption of their normal routines. State
law restricts telemarketing in some cases.
 Direct response advertising: presents the product in a very attractive way in one or two minutes infomercials in which the
seller encourages viewers to call a toll free number or go to a website to purchase the product. Infomercials are typically
cheap to make and purchase of medium time is less expensive. A disadvantage is that this medium is commonly viewed as
used to advertise products of questionable origin and quality.
 Email marketing: is also an extremely cheap tool for direct marketing. It is the easiest way to reach specific target
consumers. Measuring response rates is simple and recent data shows that response rates are higher than for direct mail.
However, its disadvantages are that email addresses go out of date faster than addresses or telephones numbers, and that the
message may end up being deleted before it is read. Email clients also tend to use of filters to identify and contain unsolicited
messages (or spam).
 Online marketing: plays an increasingly important role in direct marketing. With the wealth of information it contains, the
Internet allows consumers to search for and compare products in a convenient way. A webpage makes purchasing easy for
consumers and provides opportunities for sellers to initiate additional contact points with the consumer which may allow for
other promotional strategies (e.g. direct mailing, email mailing, etc.). Coverage limited to those with Internet access and the
skills needed from costumers to engage in online purchasing constitute its main disadvantages.
 Short Messaging Service (SMS)/Text marketing: a very attractive vehicle for direct marketing due to rapid growth of cell
phone usage. It allows for sending messages to groups of people quickly at a relatively low cost. It is easier to reach
consumers as everybody carries their phone and tend to read all of their messages. The personal nature of cell phones makes
of this a very powerful marketing tool. However, the amount of information that can be sent in a text message is limited,
some people find this approach intrusive and are wary of responding to unexpected messages and, in addition, it requires
using the services of a mobile phone company.

Other Promotional Options

7 ENTREPRENEURSHIP
 CHAPTER FOUR: MARKETING
Additional promotional tools you can implement to promote your product or service and your firm at varying levels of cost
and effectiveness include: attending or participating in trade shows and consumer fairs, developing your own newsletter and
developing brochures.
 Trade Shows and Consumer Fairs: trade shows, industry fairs, farmer’s markets, home and garden shows and State fairs,
constitute the main promotional tools for some businesses. They are very effective promotional tools because people in
attendance are already serious prospects and, additionally, they provide a great opportunity for networking. However, to
make the best use of these events, you should attend beforehand to observe whether or not the event is a good way to promote
your products or services and to identify the best strategies for an exhibit.
 Newsletters: developing a newsletter that provides up-to-date information to your customers allows you to establish a
relationship with them and stay in touch. It is a very affordable promotional tool that even firms on very small budgets can
afford. Effective newsletters are published regularly and consistently, are enjoyable and easy to read and provide solutions to
customers’ problems.
 Brochures: a venue for more detail on your product or service than almost any other promotional vehicle. You can include
color photos or images to improve attractiveness and increase customer’s retention. Include information about your
experience, skills and/or training to increase customer’s trust. Make sure you use your firm’s logo consistently throughout the
brochure and provide necessary contact information: telephone, fax, e-mail address, business address, webpage location, etc.

5. PEOPLE
The fifth P in the Marketing mix is People. Your team, the staff that makes it happen for you, your audience, and your
advertisers are the people in marketing. This consist of each person who is involved in the product or service whether directly or
indirectly.
People are the ultimate marketing strategy. They sell and push the product. People are one of the most important elements of
the marketing mix today. This is because of the remarkable rise of the services industry. Products are being sold through retail
channels today. If the retail channels are not handled with the right people, the product will not be sold. Services must be first class
nowadays. The people rendering the service must be competent and skilled enough so that that the clients will patronize your service.
The marketing efforts of people are to create customer awareness, to arouse customer interest, to educate customers, to close the sale
and to deliver the product.
Therefore, the right people are essential in marketing mix in the current marketing scenario.

6. PACKAGING
Packaging is the sixth P in the Marketing Mix. Packaging is a silent hero in the marketing world. Packaging refers to the
outside appearance of a product and how it is presented to the customers. The best packaging should be attractive enough and cost
efficient for the customers. Packaging is highly functional. It is for protection, containment, information, utility of use and promotion.

Basic Functions of Packaging

Containment and Usability
o Product packaging helps contain the products. Many products could not be displayed without packaging. For example,
packages help contain products like milk and pudding. Packaging also helps contain multiple items like donuts, pencils,
bacon and pizza rolls. Similarly, product labels tell consumers the weight of certain items as well as the number of items
contained in a package. Choosing the right container is important in marketing. Consumers must have convenient sizes
they can lift and store in their homes. Women would have trouble lifting and transporting an extremely large laundry
detergent box, for example. Labels more easily help consumers make decisions on quantities they need. For example,
large families may need two packages of pizza rolls for the week, based on the quantities mentioned on the labels.
Protection
o Marketers know certain types of packages better protect their products from temperature, vibration, compression and
extended shelf life. Therefore, they must work with research and development in producing the right types of containers.
Additionally, marketers can protect consumers by using expiration dates on products like yogurt, eggs and cheese.
Additionally, companies are becoming more aware of allergens in certain foods. Therefore, consumers may get warnings
about common product allergens like wheat, milk, yeast and soy. Also, marketers must make sure they adhere to certain
labeling laws for certain products. Besides food, there are labeling laws for electronics and textiles.
Visibility
o Marketing professionals know that elements such as color and design are important in attracting customers. Consumer
products companies may even do focus groups to test product designs before their products are introduced. A company's
product must stand out on the shelf. Competition is stiff within all product groups. A company's sales and profits are
contingent upon how well their packaging and labeling appeal to consumers. Companies with multiple product sizes and
brands can use similar color schemes or labels on all products for customers to better recognize their products.
Product Positioning
o Packaging and labeling can be used as a product positioning tool in marketing. For example, marketers may use gold
packaging and fancy labeling for higher-priced products or premium brands. Consumers who want premium brands
begin to recognize them more from the packages and labels. For example, cheese manufacturers may use fancier
packaging for specialty cheeses. Beverage products often do the same. A premium liquor company may use metal tags
on the necks of their bottles as part of their packaging. Premium packaging can represent prestige for consumers, who
may buy the products to impress friends at parties.

PACKAGING - "First impression lasts." Every consumer are looking how the product reveal its appearance outside which is one of
the great technique that affects the decision of the consumers to buy. There are some techniques to produce packaging. These are
unique, functional, safe, easy to remove and promotional packaging.
A. Unique Packaging - Packaging design with distinctive appearance better than the enterprise's competitor.
B. Functional Packaging - It is the easiest way to increase the existing package of the product to provide comfort and
enjoyment of the consumers. (Ex. Products in squeezable pouch, beverages in a can instead of bottles, ready to mix eat or
cook foods and others.)
8 ENTREPRENEURSHIP
 CHAPTER FOUR: MARKETING
C. Safe Packaging - Packaging are designed to be tested and proven to the safety of the consumers such as tightly sealed
chemical products to avoid leak, sealed caps for medicine to secure the safety of children and many more.
D. Easy To Remove Packaging - The methods of packaging where consumers can easily access to remove the product without
breaking or destroying it. Usually labeled on the package visible to the consumers like arrows indicating the upper portion of
the product inside the box.
E. Promotional Packaging - Packaging are developed to promote the interest and satisfaction of the consumers. The benefits
and advantages of the product are most written on the package. Supplement foods and beauty products are some examples of
promotional packaging.

Labelling. Label is that part of a product which carries information about the product or the seller. It could be a part of the package or
just a tag attached directly to the product. Labels identify the manufacturer, distributor, package contents and quality and contain
warnings if the product is dangerous or habit forming.

Type of Labels
1. Brand label is simply the rand alone applied to the product or to the package.
2. Grade label identifies the quality by a letter, number or word. A variation of this is the expiry date label which is required
of perishable items like milk and bread.
3. Descriptive labels and informative labels are used interchangeably. They give written or illustrative, objective
information about the use, construction, care performance or other features of the product.

7. POSITIONING
Finally, the seventh P in the Marketing Mix is Positioning. When a company presents a product or service in a way that is
different from the competitors, they are said to be “positioning” it. Positioning refers to a process used by marketers to create an image
in the minds of a target market or how a product is recognized in the marketplace through the integration of the 4P's (product, price,
promotion and place).
Solid positioning will allow a single product to attract different customers for not the same reasons. For example, A
cellphone producer positioning its product as a value user-friendly device and a fast food chain claims its product to be the cheapest
meal provider.

POSITIONING STRATERIES IN MARKETING MIX

A. Position In Advertising - It is very important to determine the needs of your target customer in order to design appropriate
advertisement for your desired product.
B. Position In Price - This is how the price of your product compares to the demand of your competitors. A high valued
products tend to have expensive price that the marketing producer must price in the larger company rather than smaller one to
avoid price comparison.
C. Position In Sales Location - Reaching your consumer is possible by choosing the appropriate distribution channel. Place
your product accessible and can easily establish its identity to your target market.

Lesson 2. Branding

According to the American Marketing Association, “brand is a name, term, sign, symbol, or design, or a combination of
these, intended to identify the goods or services of one seller or group of sellers and to differentiate them from competitors” .
Some examples of well known brands are Mc Donald’s’, Mercedes-Benz, Sony, Coca Cola, Kingfisher, Apple, Adidas etc. Branding
is the act of imprinting or engraving a brand name or symbol onto a product to provide a distinct individuality to the product. The
importance of branding cannot be neglected in today’s competitive world. Brand Identity, brand image and brand equity are important
aspects of branding. In this lesson these concepts, tries to explain their importance for both the firm and the consumers and how a firm
can efficiently build them.

BASIC BRANDING CONCEPTS

 BRAND IDENTITY
The outward expression of the brand, including its name, logo, tone, tagline, symbols and visual appearance isa brand’s identity.
It is the most fundamental means of consumer recognition and symbolizes the brand’s differentiation from competitors. A company’s
brand identity is how that business wants to be perceived by consumers.
Sources of Brand Identity
 Symbols: Symbols help customers memorize organization’s products and services as they are visual images. These can
include logos, people, geometric shapes, cartoon images, anything. For instance, Marlboro has its famous cowboy, Pillsbury
has its Poppin’ Fresh doughboy, Duracell has its bunny rabbit, Mc Donald has Ronald, Fed Ex has an arrow, and Nike’s
swoosh.
 Logos: A logo is a unique graphic or symbol that represents a company, product, service, or other entity. Adidas’s “Three
Stripes” is a famous brand identified by it’s corporate logo. The elements of a logo are:
 Logotype - It can be a simple or expanded name. Examples of logotypes including only the name are
Kellogg’s, Hyatt, etc.
 Icon - It is a name or visual symbol that communicates a market position. For example-LIC ’hands’, UTI
’kalash’.
 Slogan - It is best way of conveying company’s message to the consumers. For instance- Nike’s slogan
“Just Do It”. Apple’s tagline is “Think different”.
 Signature tune: It is a unique tone that reminds customers of specific company’s brand. For example - Britannia “ting-ting-
ta-ding”, Nokia, Windows also use a signature tune.

Importance of Brand Identity

9 ENTREPRENEURSHIP
 CHAPTER FOUR: MARKETING
Today we live in a culture that is rich in knowledge yet deprived of time. Because of this, it is often the visual identity of a
brand that catches the eyes of consumers. In many cases, people tend to form their opinions and perceptions about a brand before they
even know who it is and what it is about. This is why visual presence is essential in order to differentiate brand effectively amongst
the competition, and build trust with consumers.

Elements Important to Brand Identity

 Meaning: Great brands stand for something. A brand’s identity must express the organization’s unique mission, history,
culture, values, and personality.
 Differentiation: Brands are always competing with each other within their business category that wants the attention of
consumers. Because of all of this competition, it is not enough to just be different. Brands need to demonstrate and
communicate their difference, making it easy for customers to understand that difference.
 Durability & Flexibility: Brands need to commit to a central idea over time in order to transcend change and remain
recognizable. An effective brand identity positions a company for change and growth in the future. It supports an evolving
marketing strategy.

 BRAND IMAGE
A brand image is how the consumers perceive the brand. It is a set of beliefs held about a specific brand. It
signifies what the brand presently stands for. Consumers develop various associations with the brand. Based on these
associations, they form brand image. It is a unique bundle of associations within the minds of the target audience. Ex:
Volvo is associated with safety, Toyota is associated with reliability.
Keller’s (1993) defines brand image as "perceptions about a brand as reflected by the brand associations held in consumer
memory". According to him, brand image consists of various associations in consumers’ mind namely attributes, benefits and
attitudes.
 Attributes: Brand attributes are the functional and mental connections with the brand that the customers have. Attributes are
"descriptive features that characterized a product or service – what a consumer thought the product or service is or has and what
is involved with its purchase or consumption" (Keller, 1993). He classified attributes into product-related attributes and non
product-related attributes. Product-related attributes are the attributes which are basis for the proper functioning of the products
and services. Hence, they relate to a product’s physical composition or a service’s requirements. They determine the nature and
level of product performance. Non product-related attributes (i.e. price, packaging or product appearance information, user
imagery i.e. what kind of person uses the product or service and usage imagery i.e. in what situations the product or service is
used) are the external attributes of product and services which are purchase and consumption related. They may affect the
purchase or consumption processes but do not directly affect the product performance.

 Benefits: Benefits are the rationale for the purchase decision. Keller (1993) classified benefits into functional,
experiential and symbolic benefits. Functional benefits are related to the intrinsic advantages derived from the
consumption of product or services usually because of the product related attributes (example: hunger satisfaction
from food). These benefits often are linked to the basic motivations, such as physiological and safety needs.
Experiential benefits answer the question; what it feels like after using the product or service (example: happy,
contented, excited etc.). These benefits satisfy experiential needs such as sensory pleasure. Symbolic benefits are
the extrinsic benefits derived from product or service use and are related to non-product attributes (example:
satisfaction of social needs or self-esteem needs).
 Attitudes: Attitudes are consumers overall assessment of a brand. Brand attitudes are important because they often form the
basis for actions and behavior that consumers take with the brand (e.g., brand choice). Consumers’ brand attitudes generally
depend on specific considerations concerning the attributes and benefits of the brand.
Brand image is not created, but is automatically formed. It is a function of expectations and experiences. When customer’s
experience is better than their expectations, they tend to develop a positive brand image. When customer’s experience falls short of
their expectations, they tend to develop negative brand image.
Example: Brand image of Harley Davidson: Harley Davidson is associated with powerful, distinctive cruiser motorbikes. Also, it
is associated with freedom on the road with a little of the rebel thrown in. People buy Harley Davidson motorbikes and associated
products such as clothes, because they want to associate with powerful cruiser motorbikes and the freedom of the road.

Importance of Brand Image

Brand associations are important to marketers and to consumers. Marketers use brand associations to differentiate, position,
and extend brands, to create positive attitudes and feelings toward brands, and to suggest attributes or benefits of purchasing or using a
specific brand. Consumers use brand associations to help process, organize, and retrieve information in memory and to aid them in
making purchase decisions (Aaker, 1991). Brand image helps marketers to identify the strengths and weaknesses of their brand as well
as consumers' perceptions toward their product or services. A strong brand image is a powerful asset and makes people confident that
the organization is dependable.
Example: The Apple brand stands for innovative products, the application of ground breaking technology, high
quality products that are well made and superior to their rivals. Customers buy Apple products because they want to be associated with
high quality and innovative technology.

 BRAND EQUITY
In general terms, brand equity is the value that customer attaches to a particular brand. It refers to the difference in the behavior of
consumers towards a well known brand and a generic brand. If a consumer behaves more favorably to a branded product as compared
to a generic product, then a brand has positive brand equity. If consumer reacts less favorably to a brand as compared to generic
product, then a brand has negative brand equity. Brand equity represents the added value endowed to a product or a service as a result
of past investments in the marketing for the brand. The additional money that consumers are willing to spend to buy Coca Cola rather
than the store brand of soda is an example of brand equity.
American Marketing Association defined brand equity from a consumer’s view point - “from a consumer perspective, brand
equity is based on consumer attitudes about positive brand attributes and favorable consequences of brand use.”
10 ENTREPRENEURSHIP
 CHAPTER FOUR: MARKETING
Aaker (1991) defined brand equity as “a set of assets and liabilities linked to a brand, its name and symbol, that add to or subtracts
from the value provided by a product or service to a firm and/or to that firm’s customers”. The intangible assets of brands create the
basis of brand equity. According to Aaker’s Brand Equity Model (Five Assets Model), brand equity consists of five different asset
dimensions. These assets include brand loyalty, brand awareness, perceived quality, brand associations, and other proprietary assets
such as patents, trademarks and channel relationships. If managed well, these assets add value to the product or service and create
additional customer satisfaction, which, in turn, provide a number of benefits to the firm. (Aaker, 1991)
 Brand loyalty: The brand loyalty of the customer base is often the core of a brand’s equity. It refers to the degree to which
customers are loyal to a brand. It reflects how likely a customer will be ready to switch to another brand, especially when that
brand makes a change, either in price or in product features. As brand loyalty increases, the vulnerability of the customer base
to competitive action is reduced. Brand loyalty, on a continuum ranges from the habitual buyer to the satisfied buyer to those
who are truly committed. Brand loyalty results in reduction in the marketing costs, trade leverage, stability in revenue, ease in
attracting new customers and lowers brand switching which gives company time to respond to the competitive threats. Positive
word-of-mouth is likely to be very high.
 Brand awareness: It focuses on the degree to which a brand is known among the public which can be ascertained through
brand recognition and brand recall. It is the ability of a potential buyer to recognize or recall that a brand is a member of a
certain product category. Brand recognition requires confirmation of a prior exposure to the brand by the consumer, when given
the brand as a cue. Brand recall is next higher level of brand awareness where consumers can correctly retrieve the brand from
memory when given any cue related to such product category. Next higher levels of brand awareness are top-of-the-mind (first
mentioned brand), brand dominance (the only brand recalled), brand knowledge (when consumers know what the brand stands
for) and brand opinion (when consumers have an opinion about the brand). Brand awareness provides the anchor to which other
associations can be linked. Recognition provides the brand with a sense of familiarity and people like the familiar. When
consumer doesn’t want to engage in attribute evaluation, familiarity may be enough. Brand awareness can be a signal of
substance. The first step in the buying process is to select a group of brands to consider. Brand awareness is crucial to selecting
the brand as a part of evoked set.
 Perceived Quality: Perceived quality can be defined as the customer’s perception of the overall quality or superiority of a
product or service relative to alternatives. The quality offered by the brand provides a reason to buy and it can be used as a
strong positioning basis. It allows for charging premium prices as price is taken as a quality indicator. Channel members are
motivated to carry brands that are well regarded. Also, the perceived quality can be exploited by introducing brand extensions,
using the brand name to enter new product categories.
 Brand associations: A brand association is any mental linkage to the brand. There are different types of brand associations
which can be classified into: 1) attributes, 2) benefits, and 3) attitudes. Attributes are "descriptive features that characterized a
product or service – what a consumer thought the product or service is or has and what is involved with its purchase or
consumption" (Keller, 1993). He classified attributes into product-related attributes and non product-related attributes. Benefits
are the personal value and meaning that consumers attach to the product or service. Benefits can be further distinguished into
three categories: functional benefits, experiential benefits, and symbolic benefits. Brand attitudes are defined in terms of
consumers’ overall evaluations of a brand. Consumers believe the brand has attributes and benefits that satisfy their needs and
wants, so that a positive overall brand attitude is formed. Brand associations increase both the likelihood that information will
be accessible and the ease with which it can be recalled, contributes to brand differentiation, gives a reason to buy and thus,
facilitates buying process, develops positive attitudes and feelings and finally provide a basis for brand extensions.
 Other proprietary assets: Patents, intellectual property rights, relations with trade partners are some of the
examples of proprietary assets. Brands which accumulate more proprietary assets tend to have greater competitive advantage
relative to its competitors.

Importance of Brand Equity

The five asset dimensions (brand loyalty, brand awareness, perceived quality, brand associations and other proprietary brand
assets) that underlie brand equity are creating brand equity. The five assets model implicates that brand equity provides value to the
customer, as well as to the firm. The resulting customer value becomes a basis for providing value to the firm.
Strong brand equity of long standing may also result in that brand being used as the name of an entire category.
Thus people say, "Let me get you a Xerox of that" even when the copier used is of another brand. In this situation the brand equity of
Xerox copiers is clearly evident.

Building Brand Equity

Keller (2009) developed the brand resonance pyramid model in order to build strong brand equity. Keller's Brand Equity
Model is also known as the Customer-Based Brand Equity (CBBE) Model:
 Brand Identity (Who is the brand?): The first step is to create "brand salience," or awareness – in other words, company
needs to make sure that the brand stands out and that customers recognize it and are aware of it. It is concerned with; how
often customer recognizes or recalls a brand and what cues are necessary to remind consumers about the brand. The basic
idea is to create deep and broadened brand awareness i.e. how easily a brand is recalled and to what range of consumption
situations a brand is recalled.
 Brand Meaning (What the brand means?): Next step is to identify and communicate what the brand means, and what it
stands for. The two building blocks in this step are performance and imagery. Performance defines how well the product
meets customers' basic needs and wants. According to the model, performance consists of five categories: product
characteristics and features; product reliability, durability, and serviceability; service effectiveness, efficiency, and empathy;
style and design; and price. Imagery refers to how well the brand meets customers' needs on a social and psychological level.
Imagery has four categories: user profiles i.e. demographic profiles like age, gender, income etc. of the users of brand; usage
imagery i.e. where or when can the brand be used; personality and values: people tend to purchase those brands that they feel
match their personality; history, hierarchy and experiences: brand associations with history, hierarchy and experiences help
build brand image. Brand meaning should be such that it results into a strong, favorable and unique brand association with
the customers which in turn will help in eliciting responses from customers.
 Brand Response (How customers behave?): It focuses on how the customers respond to the marketing activities of brand
and what they perceive brand as. The two building blocks are judgments and feelings. Customers constantly make judgments
11 ENTREPRENEURSHIP
 CHAPTER FOUR: MARKETING
(rational response) about brand on the basis of: quality; credibility in terms of trustworthiness, and likability; consideration in
terms of how relevant product is to their unique needs; superiority i.e. customers assess how superior brand is relative to its
competitors' brands. According to the model, there are six positive brand feelings (emotional response) that can be evoked in
customers: warmth, fun, excitement, security, social approval, and self-respect. Company should try to derive favorable
brand responses from customers as it helps in developing strong customer relationships.
 Brand Resonance (What is the relationship between customer and brand?): Brand resonance is achieved
when customers feel a deep, psychological bond with the brand. Keller breaks resonance down into four categories:
behavioral loyalty, this includes regular, repeat purchases; attitudinal attachment, when customers love brand or product, and
they see it as a special purchase; sense of community, when customers feel a sense of community with people associated with
the brand; active engagement, when customers are actively engaged with brand, even when they are not purchasing it or
consuming it which includes joining a club related to the brand; participating in online chats etc. The strongest brands excel
in all the brand- building blocks and they are properly synchronized with the needs and
wants of customers.

CHARACTERISTICS OF A GOOD BRAND NAME

Short and simple Suggestive products benefits
Easy to spell and read Adaptable to packaging/labeling needs
Easy to recognize and remember No undesirable imagery
Easy to pronounce Always timely (does not go out of date)
Can be pronounce in only one way Adaptable to any advertising medium
Can be pronounced in all languages (for international markets) Legally available for use (not in use by another firm)

Suggested Activities Note :

Activity 1. My Imaginary Product
Draw your product and give it a name. Follow the task guide bellow. Draw it in your You can modify or create
activity notebook. Then, write a short explanation by describing the product and why
your own activity and
you come up with its name.
quizzes

Draw your product in your Activity Notebook/Activity Sheets

Activity 2. Paste the P’s

Look for newspapers or magazines. Find and identify pictures related to the P’s in Marketing Mix. Cut out the pictures, sort and paste
them on the box, then write a short description on the line next to the picture. Do it in your activity notebook/sheet.
Picture 1

Picture 2
12 ENTREPRENEURSHIP
 CHAPTER FOUR: MARKETING

Picture 3

Picture 4

Picture 5

Quizzes:
PRODUCTS
 Classify the following products into consumer goods and  A. The following words refers to tangible and intangible
industrial goods and further classify them into convenience products. You are required to put these products into their
goods, shopping goods and speciality goods, if they are right class in the appropriate boxes.
consumer goods : a) Cricket Bat
a) Stationery for the office b) Ball
b) Washing machine for use at home c) Boarding a bus
c) A car for the family use d) ‘Pollution check’
d) Oil for manufacturing soap e) Pen
e) A pair of shoes for yourself f) Getting medical advice from a Doctor
 For the following categories of goods, give two examples of  B. The following is a list of durable and non durable
each, from the products that you see around you : consumer goods. You are required to put them in the
a) Intangible goods appropriate boxes.
b) Durable goods (i) Refrigerator (iv) Washing machine
c) Non-durable goods (ii) Salt (v) Television
(iii) Soap
(iv) Washing Machine
(v) Television
PRICE
1. List the main factors affecting pricing decision of a firm.  (D) Rahul, a fruit-seller increases the price of mangoes if
a) _________________________ there is a heavy demand for them during the summer season.
b) _________________________  (E) Pinky charges a high price for the exclusive designer
c) _________________________ handkerchiefs that she designs for a selective group of
d) _________________________ customers.
e) _________________________  (F) Jahanavi lowers the price of the vegetables at her shop in
2. Which method of price fixation is being referred to here : the evening, so that customers purchase them even when
 (A) Hari fixes the price of shirts that he manufactures and they are not as fresh as they were in the morning time.
sells at a price 10% higher than its cost.
 (B) Mannat introduces a new brand of biscuits at a low
introductory price.
 (C) Sheetal fixes the price of her glassware keeping in
mind the prices for similar products in the nearby shops.

PLACE
A. Which type of channel of distribution will be suitable in each of
the following cases? Name it and draw a labelled diagram (in the
space given below) depicting the channel.
a) For a perishable product
B. State the main factors affecting the choice of distribution
channels.
a) ____________________________________________
b) ____________________________________________

c) ____________________________________________
b) Where large number of wholesalers are involved and are
scattered throughout the country. d) ____________________________________________
Resources/References:

c) For durable products like washing machines.

PROMOTION
1) Which element of the promotion mix is being referred to in the
following statements.
a) It is a temporary incentive to induce trial or purchase of a
new product.
b) It does not cost money but may involve considerable time
and effort by the marketer.
c) It is an effective promotion tool for machines, lubricant
etc.
d) Press conference, publications and news in the electronic
media are its various tools.
e) It is a paid form of non-personal communication by an
identified sponsor.

13 ENTREPRENEURSHIP
 CHAPTER FOUR: MARKETING

Resources / References:
Online:
http://publications.dyson.cornell.edu/outreach/extensionpdf/2013/Cornell-Dyson-eb1306.pdf
http://www.uop.edu.pk/ocontents/marketing%20mix.pdf
https://egyankosh.ac.in/bitstream/123456789/14744/1/Unit-7.pdf
https://www.coursesidekick.com/marketing/288272
https://www.academia.edu/35086197/BASIC_BRANDING_CONCEPTS_BRAND_IDENTITY_BRAND_IMAGE_AND_BRAND_EQUITY
https://cdn2.hubspot.net/hubfs/1562150/Marketing/Marketing%20Assets/The%20Ultimate%20Guide%20to%20Brand%20Management.pdf

Books:
Divina M. Edralin (2016). Entrepreneurship. Vibal Group, Inc., pp 77-79, 86-87.
Eduardo A. Morato, Jr. (2016) Entrepreneurship. First Edition. Rex Bookstore, Inc., pp 59-71.

Others:
DEPED Entrepreneurship modules

14 ENTREPRENEURSHIP