developing the marketing mix

• Social media and online reviews allow people to freely share their opinions and evaluate products or services based on recommendations from their network
• Reviews can significantly influence the success or failure of a brand or product
• Companies have been forced to become more transparent and responsive to the needs and preferences of their customers
• Entrepreneurs adjust their marketing tactics to match the habits of modern consumers
• According to Guillebeau (2023), there are two types of customer requirements: Service Requirement (Service) and Output Requirements (Output/Goods)
• Service Requirement (Service): An intangible thing or product cannot be physically touched but still provides a sense of fulfillment to the customer.

  • Ordering ease
  • Delivery
  • Installation
  • Customer Training
  • Customer Consulting
  • Maintenance and Repair
  • Returns
• Output Requirements (Output/Goods): Physical objects or visible entities. Consumers expect products to have specific characteristics like:

  • Form
  • Features
  • Performance quality
  • Conformance quality
  • Durability
  • Reliability
  • Repairability
  • Style
  • Customization
• Product and Service Development Process involves holistic approach that includes research, design, testing, and improving the product and service
• Using PSD with market research data, entrepreneurs can understand competition, customer demands, and market changes
• The Five Product Levels (FPL) model includes:

  Core benefit - The fundamental need or wants the customer satisfies when purchasing the product.

  Basic Product- The firm must turn the core benefit into a basic product with features necessary to function.

  Expected Product- The set of attributes and conditions customers usually expect when they purchase a product or service
• Firms classify market offerings based on durability, tangibility, and use (consumer or industrial)
• Pricing approach involves selecting the pricing objective, determining the demand, and estimating the cost
• Step 1. Selecting the Pricing Objective:

  • Competition-Based Objective
  • Cost-Based Objective
  • Customer-Value Objective
  • Market Share Objective
  • Sales Orientation Objective
  • Customer-Driven Objective
• Step 2. Determining the Demand involves analyzing market research data, conducting surveys, tracking sales data, monitoring competitor pricing strategies, and analyzing economic factors
• Step 3. Estimating the Cost involves determining direct costs involved in producing the product or delivering the service
• Step 4. Analyzing Competitor’s Price:

  • Helps make informed pricing decisions and develop effective strategies
  • Identifies opportunities to differentiate offerings and attract customers
  • Helps stay competitive with fair pricing while maximizing profitability
  • Identifies trends and patterns to adapt pricing strategies
• Step 5. Choosing the Pricing Approach:

  • Determines effective basis for settling prices
  • Adjusts basic prices for customer differences and changing situations
  • Common pricing approaches include Discount and Allowance, Segmented Pricing, Psychological Pricing, Promotional Pricing, Dynamic and Personalized Pricing
• Step 1: Trend analysis and real-world observations

  Step 2: Consumer and market research.

  Step 3: Actionable insights

  Step 4: Concept development and refinement.

  Ideation, Prototyping, Testing, Refinement

  Step 5: Implementation and launch

  Step 6: Result assessment
• In planning market offerings, firms must address the Five (5) Product Levels (FPL) model, which shows the different levels of need that customers expect from a product. The FPL model is useful in helping firms understand their customers, structure market offerings to serve customer needs and wants best, and constitute a customer-value hierarchy
• Five (5) Product Levels (FPL) include:

  Augmented product- These are any product variations or services that help exceed customer expectations and differentiate the product or service from its competitors

  Potential product- This encompasses all the possible future augmentations and transformations the product or offering might undergo.
• A.Durability and tangibility

  • Non-durable goods: These tangible goods, usually called “fast-moving consumer goods (FMCG),” are typically consumed for one or a few uses.

  • Durable goods: These tangible goods usually have a longer lifetime. It normally requires more personal selling and service, a higher margin, and seller guarantees.

  • Services: These are intangible, inseparable, variable, and perishable products that require more quality control, supplier credibility, and adaptability.
• B. Consumer Goods

  • Convenience goods: These are readily available in all markets and require little buyer effort.

  • Shopping goods: These goods are of such importance that customers devote considerable time before making a purchase.

  • Specialty goods: These goods have unique characteristics or brand identification for which customers are willing to make a special purchasing.

  • Unsought goods: These goods are those the consumer does not know about or usually thinks of buying, such as smoke detectors, life insurance, or fire extinguishers. U
• C. Industrial Goods

  • Materials and parts – These goods become part of a finished product, such as raw materials and components.

  • Capital items – These are long-lasting goods that facilitate the finished product’s development. Have two (2) groups:

  ▪ Installations include buildings and heavy equipment

  ▪ Equipment includes portable factory equipment, tools and office equipment.

  • Supplies and business services – These are short-term goods and services that facilitate developing or managing the finished product.
• Companies adjust prices to reward customers for specific responses, such as paying bills early, volume purchases, and off-season buying
• Forms of discount and allowance pricing:

  • Cash discount: price reduction given for early payment of the invoice
  • Quantity discount: price reduction for buyers who purchase large volumes
  • Trade discount: price reduction granted by manufacturers and wholesalers to resellers based on order volume or as rewards to other members of the distribution channels
  • Trade-in allowances: price reductions for turning in an old item when buying a new one, common in the automobile industry and other durable goods
• Segmented pricing involves adjusting basic prices for customer, product, and location-related differences
• Segmented pricing involves selling a product or service at two or more prices, even though the price difference is not based on cost differences
• Forms of segmented pricing include:

  • Customer-segment pricing: Different customers pay different prices for the same product or service
  • Product form pricing: Different product versions are priced differently but not according to cost differences
  • Location-based pricing: A company charges different prices for different locations, even though the cost of offering in each location is the same
  • Time-based pricing: A company’s price varies by season, month, day, or hour. For example, movie theaters charge less during the daytime, and resorts give weekend and seasonal discounts
• Psychological Pricing. In using psychological pricing, sellers consider the psychology of prices, not simply economics. This pricing strategy utilizes the power of psychology to influence customers to take action, purchase, and spend more than they usually would.
• Promotional pricing involves reducing the price of products drastically for a short period to create buying excitement and urgency
• Special-event pricing includes price reductions based on special events or certain seasons to attract more customers and increase revenue
• Limited-time offer pricing includes promotional deals like online flash sales, free shipping, and discount codes to create buying urgency and make buyers feel fortunate to have taken advantage of the deal
• Rebates offer a cash-back incentive based on the portion of interest or dividends by the buyer, aiming to increase the volume of purchases made by customers
• Dynamic and Personalized Pricing. Dynamic pricing is a pricing strategy that applies variable prices instead of fixed prices.
• Step 6: Selecting the Final Price. Choosing the final price in pricing is important because it directly affects a product's or service's profitability.
• In the marketing mix, getting products from the producer to the intended user is known as a place or distribution channel. Essentially, it encompasses how and where the product is purchased.
• Types of Distribution Channels (Bigley, 2023).

  • Direct Distribution Channel: In this channel, products are sold directly from the manufacturer to the end consumer

  • Indirect Distribution Channel: This channel involves one or more intermediaries between the manufacturer and the end consumer

  • Dual Distribution Channel: This channel uses multiple distribution channels simultaneously to reach different customer segments or markets

  • Reverse Distribution Channel: Reverse distribution refers to handling product returns, recycling, or disposing of products at the end of their life cycle.
• Types of Intermediaries:

  • Agent. work on behalf of the manufacturer and facilitate the sale of products to customers. They don't take ownership of the products but earn commissions on successful sales.

  • Wholesaler. purchase large quantities of products from manufacturers and sell them to retailers or other businesses. Serve as middlemen to smaller retailers who cannot purchase directly from the manufacturer.

  • Retailer. operate physical stores or online platforms directly selling products to the end consumer. Purchase products from wholesalers and focus on marketing.
• Promotion refers to the activities used to promote a product, brand, or service. It is an essential aspect of marketing, as it involves advertising and marketing a business's products or services. It is commonly referred to as a promotional strategy. It aims to inform potential customers about the company's offerings
• Advertising:

  • Traditional method of one-sided promotion
  • Usually paid and targets the general public
  • Gets people to do something, usually concerning a commercial product or service
  • Types include Print Advertising, Broadcast Advertising, Public/Outdoor Advertising, Digital Advertising