CHAPTER 6: MARKETING MIX IN THE DEVELOPMENT OF

MARKETING STRATEGY

MEMBERS:

CAGANDE, PAUL
DUMARAN, CHERRIEMAE
MACA, JAIRAH
MANZANO, PATRICIA
PEROCHO, DONNABILLE
ROZ, SHEILA MAE
SABADO, PURSHA
 LEARNING OUTCOMES

1. Define the meaning of product, price, place, promotion, people, packaging. positioning
and their importance
2. Determine the appropriate strategies in pricing, products, place, promotion, packaging,
positioning and people
3. Evaluate how effective the marketing mix to the organization
4. Discuss the product life cycle to create strategies; and
5. Identify the other P's in marketing
 MARKETING
MIX
is the combination of controllable elements or variables needed to develop strategy
to attain satisfaction to the market particularly both in customers and consumers, *It
is also a business tool used in the organization particularly the marketers doing the
job.

MARKETING STRATEGY

are the tactical activities that combine all of its marketing goals into one comprehensive
plan. *It should be drawn from market research through survey using questionnaire,
conducting interview and personal observation.
 PRODUCT

Product is anything that can be offered for satisfaction. It may be an idea, a physical entity (a good), a service, or any
combination of the three.

Product: Its Nature and Sustainability - Entrepreneurs must have a full knowledge as to what products are needed in the
society. The product will be for the satisfaction of the group of the target market. It must be specific, identified from the
others, and easily be recognized. An entrepreneur must conduct market research to determine better the needs and wants of
the target market. A product can be tangible or intangible in nature that can be offered for satisfaction of the recipients and
it may be an idea, a physical entity (a good), service or any combination of the three. Product is that bundle of satisfaction
which the buyer receives as the result of a lease or purchase. It includes the physical good or service itself (its form, taste,
odor, color and texture), the function of the product in use, the package, the label, the warranty, the manufacturer's and
retailer's services
 PRODUCT DESCRIPTION
NECESSITIES
1. Cite the uniqueness of product over other existing products in terms of characteristics,
variations and the like.
2. Use layman's term in describing the firm's product or service. Present a product mix if
the firm will be selling more than one product
3. Illustrate the usefulness of the product/service. Provide substantial information on
effectiveness of marketing which includes positioning strategies.
4. Present the nature including the content of raw materials that will be used in the
proposed product, and what is the source and where to find it
 LEVELS OF
PRODUCT

Tangible products - are the basic physical appearance which can be a service or idea having precise
specifications and is offered under a given/specified description or model number.

Augmented product- includes the image and service features of a certain entity. It gives emphasis on
the intangible benefits that the customer will be getting from buying the product.

Generic product -emphasizes the impact of the product to the consumer, not the seller. This will
signify the purpose of its existence and the primary objective in creating the product.
 TYPES OF PRODUCT

1. Goods are sale of the physical products from the manufacturer to the consumer or final and ultimate user.
a) Durable goods - are the physical products that are used over a long period of time These products
are expensive because of the quality of the materials used.
b) Non-durable goods - are the physical products that are quickly and easily be consumed or worn out,
become obsolete, unfashionable or no longer popular. These products are inexpensive and can easily be damaged.
2. Services- are intangible products that satisfaction can be measured in future preferences.
a) Rented-goods- services are the consumer rented facility of the sellers in a certain period of time.
b) Owned-goods - services are the repair and maintenance services rendered by the sellers to the
products of the customer,
c) Non-good service- is personal service on the part of the seller, most common are the expertise and
profession of the seller.
 CUSTOMER SERVICE IN THE
ENTERPRISE
1. Define/list the customer service the company can provide.
2. What are the company's service strengths and weaknesses?
3. Give strategies for improving the company's customer service

CHARACTERISTICS OF SERVICES
1. Intangibility is the services that cannot be displayed, transported, stored, packaged or inspected before
buying.
2. The credibility of the service provided most of the time counts.
3. Inseparability is the service provider and services that cannot be separated. It cannot accomplish the purpose
if one is missing.
4. Variability is when the service is difficult to standardize because it varies upon the performance of the
provider.
 Consumer Products

These are goods and services destined/produced for the final consumer for personal, family, or household use.

Convenience products - are purchased with the minimum or less effort because the buyer has knowledge of
product characteristics prior to shopping.

1. Staples- are low priced items that are routinely purchased on a regular basis and are products that are used
every day.

2. Impulse products - are the items that the consumer does not plan to buy. The customer was attracted to buy
the product for some reasons like the very impressive promotional campaign or low price on sale items, etc.
Shopping products - are products that the consumers acquire through further knowledge and
information in order to make final purchase decision.

1. Attribute-based shopping products provide customers with information and evaluated

product features, performance, options, warranties and other factors.

2. Price-based shopping products enable customers to judge product attributes to be the same
and look around for the least expensive item.

Specialty products- are the items with particular brands and stores to which consumers are
loyal.
 INDUSTRIAL PRODUCTS

Industrial products - are goods or services purchased for use/consumption in the production/manufacturing
of other goods or services, in the operation of a business or for resale to other customers Industrial products are
categorized based on degree of decision-making involved, cost, rapidity of consumption, role in product, and
change in form.

Market Research- is the process or sets of multiple activities that link the marketing organization with its
customers through information gathering and analysis. It specifies information required to address various
issues present in the successful marketing of product or services.

Example: Marketing Research

Sloven's Formula
 RESEARCH DESIGN MAY BE
QUANTITATIVE OR QUALITATIVE

QUALITATIVE – Is employed on data that have been assigned

numerical value.

QUALITATIVE – Mode of research is not based on precise

measurement and quantitative claims.
 TYPES OF RESEARCH
1. Exploratory Research - can be performed using literature search, survey of people on their experiences about the
product and some case studies.

2. Descriptive Research - seeks to describe issues related to future demands of a particular product. It tries to determine
the number of population that uses the product or predict future demand.

3. Causal Research - seeks to find cause and effect between one or more variables affecting the market conditions. This
involved laboratory or field experiments.

4. Historical Design- answer questions about the past, use historical approaches in collecting and interpreting data.

5. Experimental Research- manipulates variables in controlled laboratory conditions using randomly selected subjects.
It is very useful in comparing results of two subjects but in one topic or area of study.
 METHODS OF GATHERING DATA

1. Observation - means a gathering of information for research, may be defined as perceiving data
through the senses: sight, hearing, taste, touch, and smell.

2. Questionnaire - is composed of written questions related to a particular topic, with space provided
for indicating the response to each question.

3. Interview - is defined as a purposeful face to face relationship between two persons, one of whom
called the interviewer who asks questions to gather information and the other called the
interviewee or respondent who supplies the information asked for.
 SAMPLING TECHNIQUES

These are the things needed to be considered: the size of the population, the study population, the margin of error and the proportion

of the study population used, the type or technique of sampling used whether pure random sampling, systematic ran sampling,

stratified random sampling, cluster sampling or a combination of two or m techniques; actual computation of the sample and the

sample.

RESPONDENTS OF THE STUDY

These are the person who replies to something such as a survey or set of questions.

They are the sample size over the population in the study.
 SOURCES OF DATA

1. The Bureau of Census and Statistics -population, housing, industry and trade.
2. The Land Transportation Commission -vehicles, cars, trucks, motorcycles, jeeps etc.
3. The Department of Education - its regional offices, and schools, colleges, and
universities (public and private) where all enrolments and graduates are recorded.
4. The Supreme Court and all lower courts of justice - where records of judicial cases
are kept.
5. All police regencies and offices -where all criminal cases are recorded.
6. The Department of Health -where all births, deaths and pathological cases are
registered.

7. The Securities and Exchange Commission - where all trade, industrial and
commercial establishments and other organizations, profit or non-profit, are registered.

8. All other departments, offices, and entities of the government, and private
organizations, entities or offices - where different kinds and classes of data and
information are registered.
 PRODUCT LIFE
CYCLE

concept describes a product's sales, profits, customers, competitors, and marketing

emphasis from its beginning until it is removed from the market.

PRODUCT DEVELOPMENT

The company must think of a new product. A new product is a modification, creation, and
innovation of an existing product which makes the product more meaningful to the
customer.
 The new product planning process involves a series of
steps:

1. Idea Generation - searching and looking for new product or business opportunities.

Methods:

a) Brainstorming - all the members of the group can contribute in sharing ideas.
comments, and suggestions.

b) Analyzing Existing Products - a successful product that captures great market can
be analyzed as a basis in creating a new product.

c) Reading Trade Publications - inspirational story of a successful entrepreneur can

lead into a development of a new product.
 d) Visiting Suppliers' Facilities - Supplier's raw materials can be used as a
method to innovate and modify existing product.
e) Surveys - getting feedback coming from the customers and potential
market.
2. Idea Screening- ideas which are unsuitable, unattractive, or poor are junked. Ideas together with
attributes gave rated on the basis of a rating from 1-10. Ideas are rated on the following categories:
general, marketing, and production characteristics.
3. Concept Testing -ideas which have passed the screening stage will now require feedback from the
consumer.
4. Business Analysis- is a review of market factors, revenues, cost and trends.
a) Demand Projections sales potential; sales growth; rate of repurchase,:
distribution intensity.
 b) Cost Projections per unit cost; raw materials cost: cost of existing facilities and
resources; breakeven point. weaknesses of competitors; potential competitors.
c) Competition market share of company and competitors; strengths and
d) Required Investment engineering, patent search, product development. testing:
promotion: production; distribution.
e) Profitability time to recover initial cost, per unit profits, distribution
Intermediaries; control over price: Return on Investment.
5. Product Development - ideas are converted into tangible form. This stage involves:
a) Product construction: type and quality of materials, method of production, production
time and cost requirements per unit, plan capacity, sizes and colors
 b) Packaging: materials used in promotion or storage; cost; sizes and
colors;
c) Branding: choice of new or existing name; exclusivity; trademark
protection:
d) Product positioning: selecting a market segment
e) Consumer attitude and usage testing.
6. Test Marketing - involves a selling of a fully developed product in a selected city and
observing the actual or on the spot performance under the chosen marketing plan.
7. Commercialization - this involves the actual marketing of the product in the target market.
 II. Introduction

 A new product is introduced into the marketplace and the objective is to generate customer interest.

 Initial and immediate customers are called INNOVATORS who are willing to take risk because the product
is new in the market.

III. Growth
The product gains wider consumer acceptance and the objective are to expand distribution and the range of
available product alternatives. More firms enter the profitable and tested market.
IV. Maturity

The product's sales level and companies try to maintain lower price, better product features
for as long as possible.

V. Decline
The product's sales falls as substitutes and new competitors enter the market. During this
stage, firms may. Reduce or lessen the items produced and outlets used, promotion
utilized, or they can revive and renew the product by repositioning, repackaging or they
can terminate the product.
 STRATEGIES FOR MATURE PRODUCTS

1. Develop new uses or functions and new purposes for products.

2. Develop new or add latest product features.

3. Find new classes of consumers or new potential markets for present products.

4. Find new classes of consumers for modified products.

5. Increase product use for new product users.

6. Change marketing policies or strategy.

 Price

Price determines the value of a good or service to the buyers even to the
sellers. It is the amount of money needed in order to acquire a product or
service and its accompanying service.
 FIVE STEPS IN DEVELOPING A PRICING
STRATEGY

1. Objective may be: sales-based, profit-based arid status-quo based.

a) Sales Based. The firm is interested in sales growth and/or maximizing market share.

b) Profit-Based. The firm is interested in maximizing profit, earning a satisfactory profit,

optimizing the return on investment or securing an early recovery of cash.

c) Status Quo Based. The firm seeks to avoid reasonable movement actions,
minimize the effects of competitor actions, maintain good channel relations,
discourage the entry of competitors, reduce demands from suppliers and stabilize
prices.
2. Broad Price Policy - provides procedures, rules, and methods to act in one specific situation. These are the
FF:
a) Penetration pricing- uses low prices to capture/attract the larger/ mass market for a product or
service.
b) Skimming pricing- uses high prices to attract the market segment more concern with product
quality, uniqueness or status than price.
3. Price Strategies - are ways or some actions to accomplish the goals and objectives or the company
in gaining profit.
a) Cost-based price strategy - is when the firm sets prices by computing merchandise, services
and overhead costs then adding the desired profit to those figures.
b) Demand-based price strategy - is when the firm sets prices after researching consumer
desires and makes sure the range of prices is acceptable to the target market.
c) Competition-based price strategy- is when the firm sets prices in relation to the competitors.
Customary Pricing - Maintaining a consistent price over time, often suitable for products with stable
costs.

Variable Pricing - Adjusting prices based on cost fluctuations and demand, following the law of
supply and demand.

One-Price Policy - Charging the same price to all customers under similar conditions, regardless of
product variations.

Flexible Pricing - Allowing negotiation and adjusting prices to meet customer needs and promote
loyalty.
Odd Pricing - Setting prices just below even values to attract customers.

Price-Quality Association - Linking high prices to high-quality materials and low prices to lower
quality to influence customer perceptions.
Prestige Pricing - Maintaining a price floor to meet customer expectations and not going
above a price ceiling set by the government.
Leader Pricing - Offering key items at low prices to build consumer loyalty within a product
line.
Multiple-Unit Pricing - Offering discounts for bulk purchases to increase profits and control
inventory.
Price Lining - Selling goods or services with varying quality and features at different prices.
Price Bundling - Combining products and services into one total price.
Unbundled Pricing - Selling individual components separately, allowing customers to
choose what they want.
Geographic pricing - is a method where prices depend on the distance between the buyer and
the seller, typically used for distant transactions. These are the sample transactions:
FOB Factory - Buyers pay all freight charges, regardless of distance, covering expenses for
product transfer.
Uniform Delivered Pricing - Buyers pay the same delivered price for a specific quantity of
goods, with the price influenced by the quantity.
Zone Pricing - Buyers in a specific geographic area pay a uniform delivered price, ensuring
consistent charges for a particular location.
Base-Point Pricing - This is a method of calculating transportation costs based on the nearest
buyer. The closest and most accessible buyer serves as the base point for pricing and
distribution.
Terms of Payments - These are price agreements that include elements such as discounts, payment timing, and
credit terms. Discounts are given for various reasons, like cash payments, bulk purchases, or off-season buying.
Price Adjustments - Changes in cost, competitive conditions and consumer demand require changes in price.
Prices can be adjusted in the list prices, escalator clauses, surcharges, mark-ups, markdowns, and rebates.
List Prices - These are standard prices provided in catalogs, price tags, and purchase orders. Salespeople should
have up-to-date prices for negotiations.
Escalator Clauses - Contracts that allow for price increases after a sale is concluded but before delivery.
Both parties must agree to any price adjustments.
Mark-Ups - Used when demand is unexpectedly high or costs rise. Care should be taken to avoid alienating
customers.
Markdowns - Price reductions from the original selling price, often used to match competitors' prices, manage
overstock, or attract more customers. These can impact profits
Pricing strategy - is a vital part of a business plan. To achieve its goals, a firm must
determine and maintain the correct price for its product or service. In determining the right
price, the following factors must be considered:

1. The customer's perception of value of the kind of business firm;

2. The costs involved such as overhead, storage, financing, production, and distribution; and
3. The profit objectives of the firm.
 The price set by the firm may be established through any of the following
methods:

1. Cost-plus pricing - This method covers all costs, variable and fixed, plus an extra
increment to deliver profit.
2. Demand pricing - This is a method of pricing where the firm sets prices base on buyer
desires. The range acceptable to the target market is determined,
3. Competitive pricing - This method of pricing calls for price-setting on the basis of
prices charged by competitors.
4. Market pricing - This is a form of cost-oriented pricing in which the firm sets prices by
adding per-unit merchandise costs, operating expenses, and desired profit.
 Place/Distribution

A place is making the products available in the right quantities and locations where
customers want them.

Distribution
Distribution Strategy refers to the process of moving goods and services from the company
to the customer.
 Common distribution channels are the following:

Direct Sales - The company sells goods directly to end users.

OEM Sales - Manufacturers sell components that are later incorporated into finished products by others.

Manufacturer's Representatives - Wholesalers paid on commission to sell on behalf of producers.

Wholesalers - Sell to retailers or agents for further distribution.

Brokers - Buy from distributors or wholesalers and sell to retailers or end users.

Retailers - Sell directly to customers without intermediaries.

Direct Mail - Using printed materials for targeted marketing campaigns sent
directly to consumers.
Channel of distribution - is made up of people or organizations involved in the
distribution process. It is any activity of firms or individuals who take part in the flow of
goods and services from manufacturer to final consumer or business user.
 BASIC TYPES OF CHANNEL DISTRIBUTION

Direct channel distribution - involves goods and services moving directly from the
manufacturer to the end user without independent middlemen.

Indirect channel distribution - is when goods or services move from the manufacturer
to independent intermediaries before reaching the customer.
 INTENSITY OF CHANNEL COVERAGE

1. Exclusive distribution is the limited number of middleman used in a geographic area.

2. Selective distribution is organizing a moderate number of wholesalers or retailers.

3. Intensive distribution is organizing a large number of middlemen that are used to

obtain widespread market coverage and channel acceptance.
Physical distribution covers the broad range of activities in connection with the efficient delivery of raw
materials, parts, semi-finished items, and finished products to designated places and designated times and in
proper conditions.
Transportation composes the railroads, motor carriers, waterways, pipelines and airways.
Inventory Management consists of a continuous flow of goods or tangible products to match the quantity of
goods kept in inventory as closely as possible with sales demand.
Warehousing carries the physical facilities used primarily for the storage of goods held in anticipation of sales
and transfers within a distribution channel.
Retailing refers to those business activities involved with the sales of goods and services to the final consumer
for personal, family or household use.
Scrambled merchandising takes place when a retailer adds goods and services that are unrelated to each other
or the original business of the retailer.
Wholesaling is buying or handling of merchandise and its subsequent resale to organizational users, retailers
and/or other wholesalers but not the sale of significant volume to final consumers.
 Promotion

Promotion is any form of communication which is used to inform, persuade and remind people about an
organization's or individual's goods, services; image, ideas, community involvement or impact on the society.

A promotional mix is a combination of the strategies to accomplish an organization's promotion objectives.

These are the following;

1. Advertising is a paid, non-personal communication regarding goods, services, organizations, people, places
and ideas that is transmitted through various media by business firms, government and other non-profit
organization and individuals who are in some way identified in the advertising message as the sponsor.
 Advertising and Promotions Strategy

i. Define the key product or company strengths if a company intends to advertise and promote.
ii. Determine the means or media that will be used. What newspaper, television, radio, magazines, yellow pages, billboard, direct
mail, personal contacts, trade fair exhibits, (include frequency, budget and cost) will be suitable?
iii. Explain or justify why media was chosen to be the most cost-effective.

2. Publicity is a non-personal communication regarding goods, services, organizations, people, places and ideas that is
transmitted through various media but not paid for by an identified sponsor.

3. Personal Selling involves oral communication with one or more prospective buyers by paid representatives for the
purpose of. f making sales. Normally, tt this is done through door to door selling.

4. Sales Promotion - involves paid marketing communication activities that stimulate consumer purchases and dealer
effective.
 PROMOTION STRATEGY

The promotion strategy must include the following:

1. Advertising Aspects

a) Advertising budget

b) Positioning message

c) First year media schedule

2. Public Relations - This will be a detailed presentation of the publicity strategy of the
firm.
3. Sales Promotion - These are means used to support the sales message like special
sales, coupons, contests, premium awards, trade-in, among others.

4. Personal Sales present the sales strategy which includes:

a) Pricing procedures
b) Rules
c) Methods of sales presentations returns and adjustments
d) Generation of leads
e) Policies on customer Services
f) Compensation of salesmen, and
g) Responsibilities of the salesmen
 PROMOTION MIX

The Promotion Mix includes advertising, publicity, personal selling, and sales promotion
that help the organization to fully inform, persuade, and remind the customer about the
organization goods and services.
The Selection of a Promotion Mix Depends on Several Variables:
1. Product Life Cycle - An organization must be aware of the different stages of PLC and the company status to fully
design a strategy.
2. Company Characteristics - The more products line the company gains the better tools to serve the organization.
3. Relations with Middleman - The dealer such as retailer or wholesaler can give impact about company
effectiveness and efficiency.
 PACKAGING THE PRODUCT

It should be properly designed to attract the customers. A package is the container or the
wrapper of the product. Packaging is a business function that must not be taken for granted.

Purpose of Packaging

1. To protect the product on its way to the customer. It prevents tampering or adulterating the product while in storage or in
the warehouse.
2. To provide protection after the product is purchased. It protects them enclosing or encasing medicines and other harmful
products from unnecessary use.
3. It becomes part of the company's trade marketing program. It must be packaged to meet the needs of the wholesaling and
retailing middlemen.
4. It becomes part of the company's marketing program. It must identify the product and prevent substitution from the
competitor's product in the market.
 Desirable Packaging Appearance:

1. It should be environment friendly.

2. It should be durable and maintain quality after using.
3. It must protect the design, color, taste and smell of the product.

Positioning refers to how the firm differentiates their product or service from those of the
competitors and serving a niche. It is one where the firm identifies a target segment and
develops a strategy mix to address the desires of that segment.
 Before using a positioning strategy, the following
questions must first be considered:

1. What does the customer really want to buy from the firm?
2. How is the product or service different from the competitors?
3. What makes the product or service unique?

PRODUCT POSITIONING The entrepreneur must create an image to the public

presenting how they want to position the product. The customers/ target market must be
well informed about a new product what it is, what it can do, what makes it better that other
products, and who should buy it.
 MARKET POSITIONING

1. Innovator/Leader vs. Follower The idea that the company can be considered as an innovator/
leader means being an initiator in selling a new product to the market.
2. Domestic vs. International/Global A domestic firm produces only for local consumption.
There is no vision for larger market and focuses only on the minority of markets in the country.
3. Quality vs. Price The idea that Quality must be the priority in selling the product not
considering how much it will cost, it describes how the firm prioritizes the materials being used
and how it will create satisfaction to the market.
 People

Businesses can improve their ability to attract, retain and improve productivity by applying
the following five-step PRIDE process:

P- Provide a Pleasant Working Environment

R - Recognize, Reward and Reinforce the Good Behavior
I - Involve and Participate in the Activities and Programs
D- develop Skills and Attitude
E - Evaluate and Measure Performance
 Networking

Networking involves socioeconomic business activity by which entrepreneurs and business people meet to form business
relationships to recognize, create, or act upon business opportunities, share information and seek potential partners for business
ventures.

The following tips can help someone to become successful in networking career:
1. Be confident when dealing to others but be humble also.
2. Both of you are important in the meeting
3. Make the first meeting successful remember first impression last.
4. Share information to create understanding.
5. Praise other people, avoid being arrogant.
6. Let other people share, do not monopolize a conversation.
7. Thank someone.
8. Ask for referrals
9. Bring the best ideas, avoid talking nonsense or junk ideas
10. Ask for referrals
11. Bring the best ideas, avoid talking nonsense or junk ideas
12. Be conscious in time, some people are busy.
 THAT’S ALL! THANK
YOU! AND GODBLESS US
ALL! 