Quarter 1 Module 5 - 7P’s of Marketing and Business

The Marketing Mix (7P’s)

in Relation to the Business
Opportunity
 7P’S OF
MARKETING
1.Product
- The first P in the Marketing Mix is Product. Marketing strategy typically starts with the products.
Marketers can’t plan a distribution system or set a price if they don’t exactly know what product will be
offered to the market.

Product refers to any goods or services that is produced to meet the consumers’ wants and preferences.

The 2 Types of Goods

There are 2 types of goods. Consumer Goods and Business Goods. The table below shows the comparison between
the 2 types of goods.
CONSUMER GOODS BUSINESS GOODS
The demand for consumer goods is ‘direct demand’. The demand for consumer goods is a ‘derived
command’.
The number of buyers is great. Business goods have only limited number of buyers.
The buyers are found scattered in different parts of The buyers are found to be concentrating in certain
the country/ world. regions only.
Each purchase will generally be of small value. Each purchase involves a very high amount (in money
terms).
Buying is much influenced by emotions. Buying cannot be influenced by emotions.
After-sale service is important in the case of consumer After-sale service is of paramount importance in the
durables. case of all business goods.
There are a number of middlemen in the market. The manufacturers of industrial goods supply directly
to their customers.
A buyer of consumer goods may not have thorough A buyer if industrial goods must have complete
knowledge of the goods he buys and uses. knowledge of the goods he buys and uses.
The reputation of the seller or manufacturer may not The reputation of the manufacturer is always
always be given importance in buying consumer goods. important in buying industrial goods.
Inducements to the buyers in the form of cash Such inducements may not be common in the
discounts, free gifts, etc. are made always by those marketing of industrial goods.
marketing consumer goods.
The market for consumer goods is affected by fashion The market for industrial goods is affected by
and style changes. technological changes.

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 include any physical store
as well as virtual stores or online shops on the internet.
Place matters for a business of any size. It is a crucial part of the marketing mix.
 STAGES OF DISTRIBUTION CHANNEL

CHANNEL 1: Contains two stages between a producer and consumer – a wholesaler and a
retailer. A wholesaler typically buys and stores large quantities of several producers’ goods and
breaks into bulk deliveries to supply retailers with smaller quantities.
CHANNEL 2: Contains one intermediary. In costumer markets, this is typically a retailer. A
retailer is a company that buys product from a manufacturer and sells them to end users or
customers.In a sense, a retailer is a middleman that customers use to get products from the
manufacturers.
CHANNEL 3: Is called a “direct marketing” channel, since it has no intermediary levels. In this
case that manufacturer sells directly to customers.
3. PRICE
- The third P in the Marketing Mix is Price. The price is a serious component of the marketing mix.
Price is the value of money in exchange for a product or service. Generally speaking, the price is the
amount or value that a consumer gives up to enjoy the benefits of having or using a product/service.
In commerce, price is determined by what (1) a buyer is willing to pay, (2) a seller is willing to accept, (3)
the competition is allowing to be charged.
THE DIFFERENT PRICING STRATGIES AND ITS DEFINITION
Pricing Strategies Definition

Penetration Pricing The price charged for products and services is set automatically low in order to gain
market share. Once this is achieved, the price increases.

Skimming Pricing A company changes a higher price then slowly lowers the price to make the product
available to a wider market because it has a considerable competitive advantage.

Competition Pricing A pricing method whereby businesses set prices based on their competitors’ prices. In
reality 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 with
Pricing one another.

Bundle Pricing The act of placing several products or services together in a single package and selling for a lowr price than
would be charged if the items were sold separately.

Premium Setting the price of a product higher than similar products. The goal is to create the perception that the
Pricing products must have a higher value than competing products because the prices are higher.

Psychological Is the practice of setting prices slightly lower than rounded numbers, in the belief that customers do not
Pricing round up these prices, and so will treat 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 products which
are sold at premium by the same company.
Cost Plus Involves calculating total costs, then applying a markup percentage to those costs to reach an asking price.
Pricing

Cost Based A pricing method in which a fixed sum or a percentage of the total cost is added (as income/profit) to the
Pricing cost of the product to arrive at its selling.

Value Based A price selling 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 also refers to the complete set of activities,
which communicate the product, brand, or service to the user.
The following are the most common medium in promoting a product and this is called Promotional Mix
PROMOTIONAL MIX
1. ADVERTISING
• Radio – Advertising by means of radio gives the advantage of selecting the territory and audience to
which the message is to be directed. It is also cheaper than TV advertising.
• Television – This is the latest and the fast-developing medium of advertising and is getting increased
popularity these days. It is more effective as compared to radio as it has the advantages of sound and
sight.
• Print – The print media carry their messages entirely through the visual mode. These media consist of
newspapers, magazines, and direct mail.
• Electronic – You van also advertise electronically through your company website and provide important
and pertinent information to clients and customers. You can also send advertisements via direct e-mail as
part of your promotional strategy.
• Word of Mouth – Word-of-mouth advertising is important for every business, as each happy customer
can steer dozens of new ones your way. And it’s one of the most credible forms of advertising because a
person puts their reputation on the line every time they make a recommendation and that person has
• Generic – Producers join together to expand total demand for commodity, thereby helping their own sales.
These activities are often self-funded through assessments on marketing called check-off programs.
2. PUBLIC RELATIONS (PR)
- In Public Relations, the article that features your company is not paid for. The reporter, whether broadcast
or print, writes about or films your company as a result of information he/she received and researched.
PR involves sharing information with the public using platforms that do not require a payment, such as
social media or through press releases shared with magazines and newspapers. The goal of public relations
is to shape public perception of a business, presenting a positive image through various strategies to its
various constituents.
3. PERSONAL SELLING
- Personal selling occurs when an individual salesperson sells a product, service or solution to a client.
Salespeople match the benefits of their offering to the specific need of a client.
Five Stage Personal Selling Process
• Prospecting
• Making first contact
• The sales call
• Objection handling
• Closing the sale
4. SALES PROMOTION
- Is an initiative undertaken by an organization to promotr an increase in sales, usage or trial of a product
or service.
Sales Promotion Technique
• 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 customer a chance to see how well they like a product or try
Research Presentation End
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.
5. DIRECT MARKETING
- Direct marketing is a promotional method that involves presenting information about your company,
product, service to your target customer without the use of an advertising middleman. It is a targeted
form of marketing that presents information of potential interest to a consumer that has been
determined to be a likely buyer.
Forms of Direct Marketing
• Brochure
• Coupons
• Catalogs
• Email
• Fliers
• Phone calls
• Newsletters
• Text messages
• Post cards

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 one of the most important elements in the marketing mix today. This is because of the
remarkable rise of the service 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. 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, and utility of use and promotion.
Five Basic Functions of Packaging
1. PROTECTION
- One of the major function of packaging is to provide for the effects of time and environment for the
natural and manufactured products. The protection function can be divided into some classes.
A. Natural Deterioration
- It is caused by the interaction of products with water, gases, and fumes, microbiologic organisms like
bacteria, yeasts, and molds, heat, cold, dryness, contaminants insects, and rodent.
B. Physical Protection
- The packaging is also used for physical protection , which include improving stock protection, internal
product protection and reducing shock damage caused from vibration, snagging, friction, and impact.
C. Safety
= A special kind of protective packaging is required for products that are deemed harmful to those who
transport them or use them. These products includes extremely inflammable gas and liquid, radioactive
elements, toxic materials, etc. This packaging should also be done so that children could not easily use or
dispose them.
D. Waste Reduction
- Packaging also serves to reduce the amount of waste especially in case of food production.
2. CONTAINMENT
- This include merging of unit loads of shipping. It starts with spots of adhesive on the individual shippers
that stick them together, straps of steel and plastic, entire coverings of shrinkable or stretchable plastic
films and paper or corrugated wraps that surround an entire pallet of product.
There are some special bulk boxes or pallet bins made from an unusually strong corrugated board or
fabricated from plastics or metal, the method of which depends on the type and weight of product and its
protective needs. The cargo containers made of aluminum used to hold many pallet loads of goods can be
transferred to or from ships, trains, and flatbed trucks by giant canes.
3. INFORMATION
- The packaging conveys necessary information to the consumers. The common information that the
packaging provides include general features of the product, ingredients, net weight of the contents, name,
address of the manufacturers, maximum retail price (MRP).
4. UTILITY OF USE
- The convenience packaging has been devised for foods, household chemicals, drugs, adhesives, paints,
cosmetics, paper goods and a host of other products. This type of packaging includes dispensing devices,
prepackaged hot meals, and disposable medical packaging.
5. PROMOTION
- Companies use attractive colors, logos, symbols, and captions to promote the product that can influence
customer purchase decision.
Packaging Decisions:
i. Packaging concept : this defines what the package should be or do for the particular product in
terms of size, shape, materials, color, text, and brand mark and tamperproof ability.
ii. Engineering Tests : This will ensure that the package stands up under normal conditions.
iii. Visual tests : This is to ensure that the script is legible and colorrs are harmonious.
iv. Dealer Tests : This is to ensure that the dealers find the packages attractive and easy to handle.
v. Consumer tests : This is to ensure favorable consumer response.

7. POSITIONING
- Finally, the seventh P in the Marketing Mix is Positioning. When a company presents a product 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. Single
positioning will allow a single product to attract different customers for not the same reasons. There are
three basic concepts for positioning. These are Functional Positions, Symbolic Positions, and
Experiential Positions. FUNCTIONAL POSITIONS deal with solving a problem, providing benefits, and
getting a favorable perception from investors, stockholders, and consumers. SYMBOLIC POSITIONS deal
with self-image enhancement, ego identification, belongingness, social meaningfulness, and affective
fulfilment and EXPERENTIAL POSITIONS deal with providing sensory or cognitive stimulation.
Steps of the Positioning Process
Step 1: Confirm Your Understanding of Market Dynamics
At the start of the positioning process, you need a firm understanding of your target market and answers
to the following questions:
• In which product, service or market category do you plan to use this positioning?
• Which target segment is your focus for the positioning you are developing?
• What factors d these buyers eva;uate when they make a purchasing decision?
• How do theses buyers view your competitors in the category?
If you don’t have answers to these questions, you should consider conducting formal or informal
marketing research to reach a better understanding of your target market and the market dynamics around
it.
Step 2: Identify Your Competitive Advantages
A competitive advantage is some trait, quality, or capability that allows you to outperform the competition.
It give you product, service , or brand advantage over others in purchasing decisions. Competitive
advantage may come from all of the following:
• Price : Something in your production process or supply chain may make it possible for you to provide
comparable value at a lower cost than competitors.
• Features : You may provide tangible or intangible features that your competitors do not: for example,
more colors, better taste, a more elegant design, quicker delivery, personalized service, etc.
• Benefits : You may provide unique benefits to customers that your competitors cannot match. Benefits
are intangible strengths or outcomes your customer gets when they use your offering. For example, time
savings, convenience, increased control, enjoyment, relaxation, more choices, feeling better about
oneself, being more attractive, etc.
Create a list of the things that make you different from competitors in positive ways. Then identify which of
these factors are also competitive advantages: The influential factors that help you perform better in the
marketplace and cause customers to choose your product, service, or brand over other options.
Step 3: Choose Competitive Advantages That Define Your Niche
Your list of competitive advantages represents a set of possible positioning strategies you could pursue for
your product, service, or brand. The next step is to examine how these factors fit into customer perceptions
of your broader competitive set. Your goal is to pick a positioning approach that gives you a unique and
valued position in the market that competitors are not addressing.
How to Create an Effective Market Positioning Strategy?
1. Determine company uniqueness by comparing to competitors
- Compare and contrast differences between your company and competitors to identify opportunities.
Focus on your strengths and how it can exploit theses opportunities.
2. Identify Current Market Position

- Identify your existing market position and how the new positioning will be beneficial in
setting you apart from competitors.

3. Competitor Positioning Analysis

- Identify the conditions of the marketplace and the amount of influence each competitor
can place on each other.

4. Develop a Positioning Strategy

- Through the preceding steps, you should achieve an understanding of what your
company is, how your company is different from competitors, the conditions of the
marketplace, opportunities in the marketplace, and how your company can position itself.
DEVELOPIN
G A BRAND
NAME
Brand Name – is a name, symbol, or other feature that distinguishes a seller’s goods or
services in the marketplace. Your brand is one of your greatest assts because your brand
is your customers’ overall experience of your business. Brand Strategy is a long-term
design for the development of a popular brand in order to achieve goal and objectives.
Branding is a powerful and sustainable high-level marketing strategy used to create or
influence a brand.

Commonly Used Branding Strategies

1. PURPOSE – According to business strategy insider, purpose can be viewed in two ways:
A. Functional – This way focuses on the assessments of success in terms of fast and profitable reasons.
B. Intentional – This way focuses on fulfilment as it relates to the capability to generate money and do
well in the world.
2. CONSISTENCY – The significance of consistency is to avoid things that don’t relate or improve to your
brand. Consistency aids to brand recognition, which fuels customer loyalty.
3. EMOTION – There should be an emotional voice, whispering “Buy Me”. This means you allow the
customers to have the chance to feel that they are part of your brand. You should find ways to connect
more deeply and emotionally with your customers. Make them feel they’re part of the ffamily and use
emotion to build relationships and promote brand loyalty.
4. FLEXIBILITY – Marketers should remain flexible too in this rapidly changing world.
Consistency targets at setting the standard for your brand, flexibility allows you to adjust
and differentiate your approach from your competitor.

5. EMPLOYEE INVOLVEMENT- It is equally important for your employees to be well

versed in how they communicate with customers and represent the brand of your
product.

6. LOYALTY – Loyalty is an important part of brand strategy. At the end of the day, the
emphasis on a positive relationship between you and your existing customers sets the
tone for what potential customers can expect from doing business with you.

7. COMPETITIVE AWARENESS – Do not be frightened of competition. Take it as a

challenge to improve your branding strategy and craft a better value in your brand.