The Marketing Mix

• Marketing Mix: Is a widely accepted strategic marketing tool that combines the original 4Ps (product, place, price, promotion) with the additional 3Ps- people, packaging, and process- in formulating marketing tactics for a product or service.
• 7Ps: are employed until the entrepreneur finds the right combination that will most effectively serve the customer’s needs and wants
• 7Ps: are controllable by the entrepreneur and therefore must be well thought of to be successful
• 4Ps: these were used before 7ps in marketing products or physical goods only.
• 4Ps: was not applicable in marketing products so 7Ps were introduced
• Marketing Mix: will be able to address marketing components of both goods and services and even the hybrids.
• Product


  What item or service is the most appropriate for the opportunity, and why will customers buy or avail them?
• Place


  What location is the best suited for the business where there are more potential customers? Can they conveniently transact on-site or online? How is the process of distribution of products or performances of services?
• Price

  What is the most appropriate price, and what pricing strategies will be used for the target customers?
• Promotion


  What is the most effective advertisement or combination of advertisements and which advertising tool should be used to drive awareness and increase sales?
• People: What type of people need to be hired? What are the basic skills needed for the job? What leadership style will be applied by the entrepreneur?
• Packaging: What is the best packaging for the product that is attractive enough to customers and cost-efficient at the same time? What physical evidence does the entrepreneur need to set up so as to sell the service?
• Processing: What is the most compelling feature of the product or the business that will make difference in the lives of the customers? What sets the product or service from the rest?
• product: is any physical good, service, or idea that is created by an entrepreneur or an innovator in serving the needs of the customers and addressing their existing problem
• The three-level concept of product or services: Summarizes the reasons that a customer decides to buy a product or avail of a service.
• The Three-level Concept of Product or Services:

  • Level 1: Core Benefits of the Product or Service
  • Level 2: Physical Characteristics of the Product or Service
  • Level 3: Augmented Benefits of a Product or Service
• core benefits of a product or service: are the major factors why a customer buys a product or avails of a service.
• Physical Characteristics of the Product or Service: Customers tendency is to look for the second layer of selection, ie., which has a better packaging for products or a better physical evidence or customer experience for services.
• Augmented Benefits of a Product or Service: Entrepreneurs must provide customers with augmented benefits that distinguish them from their competitors.
• place: refers to a location or the medium of transaction.
• Place: a Strategic location depends on the nature of the business and the primary target market
• Price: is the peso value that the entrepreneur assigns to a certain product or service after considering its costs, competition, objectives, positioning, and target market.
• Price: It is the only P in the 7Ps that generates revenue for the business.
• Most common pricing strategies:

  • Bundling
  • Penetration Pricing
  • Skimming
  • Competitive Pricing
  • Product Line Pricing
  • Psychological Pricing
  • Premium Pricing
  • Optional Pricing
• Bundling: refers to two or more products or services in one reduced price
• Penetration Pricing: refers to setting low prices to increase market share, but the entrepreneur will eventually increase the price once the desired market share is achieved
• Skimming: opposite of penetration pricing, where prices are initially high then lowered to offer the product or service to a wider market
• Competitive Pricing: refers to bench marking prices with the competitors
• Product line Pricing: this refers to pricing different products or services within a parallel product array using varying points
• Psychological Pricing: this considers the psychology and positioning of price in the market
• Premium Pricing: refers to setting a very high price to reflect elitism and superiority
• Optional Pricing: this refers to adding an extra product or service on top of the original to generate more revenue
• Two classifications of costs:

  • Variable costs or controllable costs
  • fixed costs or uncontrollable costs
• Variable costs or controllable costs: These costs are directly proportional to the number of products manufactured or to the number of services performed.
• Fixed costs or uncontrollable cost: These are costs not directly proportional to the manufacturing of a product or to the performance of the service. These are usually the cost of equipment, employee remuneration, rental cost, and utilities.
• Fixed costs or uncontrollable costs: costs that the business will still incur whether or not they provide more or less
• Fixed cost or uncontrollable cost: cost associated with your business's product that must be paid regardless of how much you sell
• Variable cost or controllable cost: cost directly related to the sales volume of your business
• Fixed cost or uncontrollable cost: remain the same regardless of your sales
• Variable costs or controllable cost: change based on your sales activity