Marketing Mix (7Ps) in Relation to the Business Opportunity PDF

The Marketing Mix (7P’s) in Relation to the Business Opportunity MARKETING MIX A marketing mix is a business mechanism used to market products effectively. 02 MARKETING MIX A set of controllable and connected variables that a company gathers to satisfy a customer better than its compet...

The Marketing Mix (7P’s) in Relation to the Business Opportunity MARKETING MIX A marketing mix is a business mechanism used to market products effectively. 02 MARKETING MIX A set of controllable and connected variables that a company gathers to satisfy a customer better than its competitor 02 7 Ps of Marketing There are several important frameworks that you can utilize to market your product and services. A crucial structure among these is the “7 P’s of Marketing. 02  1. 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 Product refers to any goods or services that are produced to meet the consumers’ wants, tastes, and preferences Examples of goods include tires, MP3 players, clothing, etc. Examples of services include hair salons and accounting firms. Services can be divided into consumer services, such as hair styling or professional services. Consumer Goods Products intended for personal consumption by the general public. Types: Durable Goods: Items with a long life span (e.g., appliances, cars). Nondurable Goods: Items with a short life span (e.g., food, toiletries). Business Goods Products purchased for use in the production of other goods or for providing services.  Raw Materials: Basic materials used in manufacturing (e.g., steel, lumber). Component Parts: Finished items that become part of a larger product (e.g., computer chips).  Capital Goods: Equipment used in production (e.g., machinery, buildings).  Supplies: Items used in the operation of a business (e.g., office supplies, cleaning products). 06 CONSUMER SERVICE Typically more standardized and accessible. Examples include retail, hospitality, and personal care services (like haircuts or home cleaning). CONSUMER SERVICE Often involve direct interactions with customers, focus on convenience and satisfaction, and may have lower costs. Professional Services Customized and often complex, requiring specialized knowledge or skills. Examples include legal services, consulting, accounting, and engineering. Professional Services Typically involve more in- depth analysis, often have higher costs, and may include long-term contracts or projects.  2. Place Place represents the location where the buyer and seller exchange goods or services. It is also called as the distribution 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. 08 Channel 1 – wholesalers and retailers. A wholesaler typically buys and stores large quantities of several producers' goods and then breaks into bulk deliveries to supply retailers with smaller amounts. For small retailers with limited order quantities, the use of wholesalers makes economic sense Channel 2 –one intermediary. A retailer is a company that buys products from a manufacturer or wholesaler and sells them to end users or customers. In a sense, a retailer is an intermediary or middleman that customers use to get products from the Channel 3 is called a "direct-marketing" channel Since it has no intermediary levels. In this case, the manufacturer sells directly to customers  3. Price The price is a serious component of the marketing mix. What do you think is the meaning of Price?  Price It is the amount or value that a customer gives up to enjoy the benefits of having or using a product or service. Customers exchange a certain value for having or using the product – a value we call price. In commerce, price is determined by What a buyer is willing to pay What a seller is willing to accept What the competition is allowing to be charged With product, promotion, and place of marketing mix, it is one of the business variables over which organizations can exercise some degree of control. 11 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.11 The Different Pricing Strategies and Its 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.  Skimming Pricing 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 Pricing A pricing method in which a seller uses prices of competing products as a benchmark instead of considering own costs or the customer demand. Competition Pricing In reality a firm has three options and these are to price lower, price the same or price higher than competitors Product Line Pricing The practice of reviewing and setting prices for multiple products that a company offers in coordination with one another. Rather than looking at each product separately and setting its price Product Line Pricing Aim to maximize the sales of different products by creating more complementary, rather than competitive products. Product Line Pricing 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 Pricing Psychological pricing is the practice of setting prices slightly lower than rounded numbers, in the belief that customers do not round up these prices, and so will treat them as lower prices than they really are.  Optional Pricing The company earns more through cross-selling products along with a basic core product. Optional Pricing The main product 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 Pricing It involves adding a markup to the cost of goods and services to arrive at a selling price. Cost Plus 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 Cost Based Pricing A pricing method in which a fixed sum or a percentage of the total cost is added (as income or profit) to the cost of the product to arrive at its selling price  Value Based Pricing A price-setting strategy where prices are set primarily on consumers' perceived value of the product or service.  4. Promotion refers to the complete set of activities, which communicate the product, brand or service to the user.  4. Promotion 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 mediums in promoting a product and this is called promotional mix. PROMOTIONAL MIX 1. ADVERTISING Radio Word of Mouth Television Generic Print Electronic 2. PUBLIC RELATIONS OR PR The article featuring your company is not paid for in public relations. 2. PUBLIC RELATIONS OR PR The reporter, whether broadcast or print, writes about or films your company as a result of information he or she received and researched. 2. PUBLIC RELATIONS OR PR 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 needs of a client. 3. PERSONAL SELLING Today, personal selling involves the development of longstanding client relationships. Five Stage Personal Selling Process 1. Prospecting 2. Making first contact 3. The sales call 4. Objection handling 5. Closing the sale 16 4. SALES PROMOTIONS Sales promotion is any initiative undertaken by an organization to promote an increase in sales, usage or trial of a product or service. 18 Sales Promotion Technique Free Samples Free Trial Customer Contests Special Pricing 18 Sales Promotion Technique  5. DIRECT MARKETING Direct marketing is a promotional method that involves presenting information about your company, product, or service to your target customer without the use of an advertising Forms of Direct Marketing Brochure Catalogs Fliers Newsletters Post cards Coupons Email Phone calls Text messages  5. PEOPLE This consist of each person who is involved in the product or service whether directly or indirectly. 17  People are the ultimate marketing strategy. 17 The people rendering the service must be competent and skilled enough so that that the clients will patronize your service. 17 The marketing efforts of people are ; 1. To create customer awareness 2. To arouse customer interest 17 3. To educate customers 4. To close the sale and to deliver the product. 17 6. PACKAGING Packaging is a silent hero in the marketing world. 18 6. PACKAGING Refers to the outside appearance of a product and how it is presented to the customers. 18 Five Basic Functions of 1) Protection: One of the major functions of packaging is to provide for the effects of time and environment for the natural and manufactured products. 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 and insects and B. Physical protection: The packaging is also used for physical protection, which include improving shock 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 include extremely inflammable gas and liquid, radioactive elements, and toxic materials. D. Waste reduction Packaging also serves to reduce the amount of waste especially in case of food distribution. 2. Containment This involves the merging of unit loads for shipping. Methods used to secure and hold together multiple units of products for transportation. 3)Information: The packaging conveys necessary information to the consumers. Common information that packaging provides includes general features of the product, ingredients, net weight of the contents, name and address of the manufacturer, and 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 4)Utility of use: This type of packaging includes dispensing devices, prepackaged hot metals, and disposable medical packaging. 5) Promotion: Companies use attractive colors, logos, symbols, and captions to promote the product which can influence customer purchase decisions. 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 colors 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 Positioning refers to a process used by marketers to create an image in the minds of a target market.  Solid positioning will allow a single product to attract different customers for not the same reasons. Step 1: Confirm Your Understanding of Market Dynamics Step 2: Identify Your Competitive Advantages Step 3: Choose Competitive Advantages That Define Your Niche Step 4: Define your positioning strategy Step 5: Communicate and deliver the positioning strategy