Tutorial Topic 8

1. What are the 7 Ps of the extended marketing mix?

Price, Product, Placement, Promotion, People, Process and physical evidence

2. Outline and briefly explain the issues that determine the marketing goals set by a business
owner.
• Does one channel provide a comparative advantage over others?
• What is the industry norm for distribution?
• Pricing – is it too expensive?
• How much packaging and handling of goods is required?
• How and when will you be paid?

This helps in answering basic questions related to the marketing goals and hot ti can be
minimized.

3. What are the different types of pricing strategy that can be used by a firm?

• Skimming- sets a relatively high initial price for a product or service at first, then lowers
the price over time. It is a temporal version of price discrimination /yield management.
• Discounted
• Loss
• Price lining (or price segmentation) - is a marketing process wherein products or services
within a specific group are set at different price points. The higher the price, the higher
the perceived quality to the consumer

4. How are a break-even point and a contribution margin calculated?

Breakeven point is where revenue equals expenses and no profits are made
Break even point= total fixed costs divide by unit sales price – variable cost per unit

Contribution margins the proportion of money left in each dollar of sales, after variable costs
have been met, that is available to cover fixed costs and contribute to profits

Total Sales - Total Variable Costs

Contribution margin =
Total Sales
5. Explain the different types of intermediaries that exist in the placement component of the
marketing mix.

– Directly from business to final customer

– Through agents
– Via brokers
– By wholesalers
– Through retailers

6. Which firm is more able to market its products/services effectively: a new, small
entrepreneurial venture or an established large corporation?
Established large corporation because it has the resources to do so and an existing customer base

7. Do you think that new businesses should put more emphasis on ‘price’, ‘place’ or ‘people’
when developing a marketing mix strategy?

People- place- price

8. How does the creation of target market groups help the overall marketing process?

It lays an outline for the foundation of the marketing process