CHAPTER 4: LET THE MARKET KNOW YOU BETTER

 In its broadcast sense, marketing is about creating and accumulating customers. Marketing plans are designed to
capture market share and defeat competitors. The marketing function and the marketing mix serve the overall
business strategy. It is summarized in seven Ps by which the enterprise will engage competitors and gain
customers. These Ps are Positioning, Product, Packaging, Place, People, Promotion, and Price.

Positioning
 is the way the customers perceive the enterprise and its products or services in their minds. The stronger the
overlap is in these three perspectives, the more defined the positioning of an enterprise is in the marketplace.

Three overlapping objectives

First, positioning has an enterprise perspective
Second, positioning has a competitive perspective
Third, positioning takes the customers’ perspective
 Enterprises can establish their positioning either by starting with their own product creations or with their
customers’ outcome expectations. The competitors will always be part of the positioning equation, whether the
enterprise starts with the product or the customer perspective. After all, marketing warfare takes place in a
competitive arena.
 The competitive landscape of the enterprise, relative to its market, can be clearly mapped out by laying out both
the latitudinal and longitudinal market dimensions.

Latitude lays out what is important to the different customer segments from their differing points of view.
Longitude in the marketing map represents the product features and attributes of competitors in the marketplace.

Branding serves three purposes.

 First is to differentiate the product from other products.
 Second is to avoid a commodity image for the product.
 Third is to fill a space in the customer’s mind that would prevent other products from occupying the same space.

Product
 is the tangible good or intangible service that the enterprise offers to its customers in order to satisfy their needs
and to produce their expected results.
There are four general types of products that are marketed by entrepreneurs:
1. Breakthrough products - offer completely new performance benefits. They may double the performance at half the
cost.
2. Differentiated products - try to claim a new space in the mind of the customer different from the spaces occupied by
existing products.
3. Copycat products - will not make much impression on the customer’s mind. The marketer should make up for this lack
of mental space by offering more physical space in the shelves, lower prices, easier access, promotional freebies, and the
like.
4. Niche products - do not intend to compete directly with the giants. They are products with lower reach, lower
visibility, lower price, and lower top of mind.

Packaging
 came in small, medium, and large sizes without much variation in the material, shape, and purpose of the
packaging.
 Packaging does not refer only to the wrapper or container of the product. It can mean the bundle of products or
services that are put together to attract and delight customers. It can also mean the terms and conditions attached
to the sale or after-sale servicing of the product.

Place
 “Location.Location.Location.” This is the often-recited mantra of salespeople who want to have the best access to
their customers. Although finding a good location proves to be challenging, even more challenging is maximizing
the potentials of that location.
The final choice of location must be based on the following:
1. Image and location conditions. This refers to the physical look of a location, sanitary conditions, crimes and
safety levels, etc.
2. Exact fit to target customers. Is the location traffic generally composed of your target customers?
3. Clustering of competitor establishments. This oftentimes results in drawing a bigger market to the location.
4. Future area development. A certain location might not have the most customers or the best economics in the
short term, but it might become a central business hub within the next five years.
5. Fiscal and regulatory requirements. An entrepreneur would want to set up shop in a town or city with low tax
rates, good governance, excellent infrastructures, and great public services.

Geography and Atmosphere Determinants

 The geography and atmosphere decision tensions provide alternative choices to the marketing strategies. The
final decision would depend on the positioning of the enterprise and its products in the marketplace.

For the geography determinant there are six decisions tensions:

1. Concentration versus Destination - large concentrations of target customers & modern transportation means and
the longing to be relieved from city living-related stress have paved the way from destination places.
2. Access versus Abundance - the ability to reach a place easily and inexpensively & easy access to customers but
their product and service offerings may be limited unlike large commercial malls that offer a wide range of
products and services.
3. Clustered versus Dispersed - allow customers to choose from a great variety of product offerings & dispersed
competitors experience better business results in certain industries because they practically ‘own’ the market
located within the area of business.
4. Developed versus Underdeveloped - would have ready-made markets and all the utilities and transportation
systems in place but tend to be more expensive than underdeveloped areas. The latter may be cheaper to locate
in, but the market would take time to grow and all the usual amenities might not yet be in place.
5. Physical versus Virtual - traditional way where the customers has no choice but to go to the shop where the
product or service is available no matter how long it takes them to get there & the proliferation of virtual market
places where customers and sellers converge at the comfort of their own homes or wherever they are through
computers, laptops, or mobile devices.
6. Upscale versus Downscale- more well-off customers can afford to spend more in upscale places & Downscale
places have the advantage of attracting the masses that might have lower purchasing power but greater
numbers.

Atmosphere refers to the state or condition of the environment which allows the mind and mood of customers, either in a
positive or negative way.

For the atmosphere determinant, there are five decision tensions:

1. Formal versus Informal - A formal atmosphere projects stylized, classy, highly organized and well-structured
image for the place. It gives customers the feeling of elegant tradition and civilized order. On the other hand, an
informal atmosphere projects a casual, easy going unstructured and unpretentious image for the place.
2. Exclusive versus Public - Exclusivity is the preferred atmosphere by some customers who want privacy and
elitist isolation. The opposite feeling is desired by customers who want a public atmosphere, one where people
from all walks of life can congregate.
3. Conservative versus Adventurous -These customers want to experience the familiar, the tried and tested, and
the “normal.” At the other end, customers crave for adventurism. They want to try out-of-the-ordinary
escapades.
4. Aesthetics versus Functionality- There are customers who go for the aesthetics of a place while others go for
the functionality of the place.
5. Minimalist versus Maximalist- There are customers who do not want clutter in the atmosphere. They like the
minimalist approach and believe in the adage that “less is more.” The opposite is true for customers who are
maximalists. They like everything to be in one place altogether.
People
 are the ultimate marketing strategy.

The marketing efforts of people are organized at four levels:

(1) to create customer awareness;
(2) to arouse customer interest;
(3) to educate customers as they evaluate their buying choices; and
(4) to close the sale and deliver the products.

Closing the sale demands that the product be available, adequate, acceptable, and affordable.

Availability means that the enterprise has the goods or services on hand.
Accessible means that the customers can easily get the product from their usual buying places or the products can be
conveniently delivered to them.
Adequate means the product meets the quality and delivery specifications of the customer.
Acceptable means that the customer is convinced by the selling points of the product, finds very little or no objectionable
features in the product, and accepts the conditionality, warranties, and amenities given by the seller.
Affordable means the price and payment terms are right.

Promotion
 is the explicit communication efforts of the enterprise, such as advertising, public relation campaigns, promotional
tours, product offerings, point of sale displays, websites, flyers, emails, letters, telemarketing, and others.

Effective promotion depends on three critical factors:

1. the credibility of the communicator;
2. the message and the medium of the message; and
3. the receptiveness of the audience to all that is being communicated.

Price
 price is a major factor for the customer in buying a product, it is not the only factor such as in the case of buying
premium products.

Cost recovery pricing charges a price that allows the organization to merely recover its full costs. The purpose is to
reinvest the sales proceeds to produce additional products and reach out to more people.

Marginal pricing sets the price higher than the variable costs of a product but lower than the full costs in order to
increase overall profitability. This practice is done to utilize excess production capacity that would otherwise be unused.

There are other pricing objectives which the enterprise may have. It may offer introductory or promotional pricing to
launch a new product. It may charge different prices in different geographical areas to take care of additional logistics
costs in farther locations or to accommodate the lower purchasing power in poorer geographic areas. Discount pricing
may be given to loyal and regular customers to maintain their patronage.