Marketing Mix:

The 7Ps of Marketing

Content Outline
• Marketing Mix
• Buying Behavior
• Assembling the Marketing Mix
• Diagnostic Marketing Mix
• Marketing Plan
• 4S’s in Marketing Plan
The Marketing Mix
• More popularly referred to as the 7Ps of
Marketing, it is a set of controllable and
interrelated variables comprised of the
product, place, price and promotions, people,
process & physical environment that a
company assembles to satisfy a target group
better than it’s competitor.
• As a strategy, it is choosing and implementing
the best possible courses of action to attain
the organization’s long-term objectives and
gain competitive edge.
Producer vs. Customer

The 7 P’s The 7 C’s

Product Customer/ Consumer
Price Cost
Place Convenience
Promotion Communication
People Caring
Processes Co-ordinated
Physical Evidence Confirmation
Product

Design
To satisfy the Technology
needs and wants Usefulness
Convenience
of the target
Value
market. Quality
Packaging
Branding
Accessories
Warranties
Pricing Strategies
Price Skimming
Setting a high price for a new high- end product (such as an expensive perfumes) or a uniquely differentiated
technical product. Its objective is to obtain maximum revenue from the market before substitutes products
appear. After that is accomplished, the producer can lower the price drastically to capture the low-end buyers.

Penetration
Offering a low price for a new product or service during its initial offering in order to attract customer. The
reason behind this marketing strategy is that customers will buy and become aware of the new product due to its
lower price in the marketplace relative to rivals.

Psychological
Setting prices according to the psychographics of the aimed-at market segment.

Cost Plus
This pricing includes the variables costs associated with the goods, as well as a portion of the fixed costs of
operating the business.

Loss Leader
Prices products lower than the cost to produce them in order to attract new customers or to sell
additional products to customers. Companies typically use loss leader pricing when they are entering
new markets or attempting to increase market share.
Placement

• The place where customers buy a product, and the means of

distributing the product to that place, must be appropriate and
convenient for the customer. The product must be available in the
right place, at the right time and in the right quantity, while
keeping storage, inventory and distribution costs to an acceptable
level.
• Customer surveys have shown that delivery performance is one of the
most important criteria when choosing a supplier.
Placement
Types of Placement
Retail Sells directly to consumers.

Wholesale Buys large quantity of goods from various producers, stores them, then resells to retailers. Distributors carry
non-competing goods.
Mail order A system of retailing in which customers order merchandise, usually from a catalogue, by mail; the goods are
shipped direct to the customer's home.
Internet Selling of goods and services using the internet.

Direct Sales Face to face presentation, demonstration, and sale of products or services, usually at the home or office of a
prospect by the independent direct sales representatives. Direct selling differs from network marketing in that
it offers little or no incentives for recruiting ever increasing number of sales representatives.
Peer-to-peer Leverages brand advocates as an engine for sales. It rests on the idea that satisfied customers are willing to
share their positive experiences with your business with their peers, projecting the voice of the customer and
enabling sales through word-of-mouth.
Multi-channel Process of selling your products on more than one sales channel. Multichannel selling includes a mix of the
website and shopping cart, online marketplaces, mobile marketplaces and/or bricks and mortar stores.
Promotions

To build and improve consumer demand, promotions has four

components:
• Advertising – to effectively inform and persuade the target
market
• Public Relations – to offer a positive image of the company
and the brand
• Personal Selling – to get the customers to buy
• Sales Promotions – to convince customers to buy
immediately
Types of Promotions

Special Offers
Advertising
Endorsements
User Trials
Direct Mailing
Leaflets/ Posters
Free gifts
Competitions
Joint ventures
Promotions

o Promotion is the way a company communicates what

it does and what it can offer customers. It includes
activities such as branding, advertising , PR,
corporate identity, sales management, special offers
and exhibitions.

o Promotion must gain attention, be appealing, tell a

consistent message and above all else give the
customer a reason to choose your product rather than
someone else’s.
Promotions
• Good promotion is not one-way communication, It paves
the way for dialogue with customers.
• Promotion should communicate the benefits that a
customer obtains from a product, and not just the feature
of that product.
• Whether your promotional material is a single sheet or a
complex brochure, folder or catalogue, it must grab the
attention of your customers. It should be easy to read
and enable the customer to identify why they should buy
your products.
Promotions

• Advertising - The activity or profession of producing

information for promoting the sale of commercial
products or services.
• Branding - An identifying symbol, words, or mark that
distinguishes a product or company from its
competitors. Usually brands are registered
(trademarked) with a regulatory authority and so
cannot be used freely by other parties. For many
products and companies, branding is an essential part
of marketing.
Promotions
• Endorsement - A written or public statement by a
celebrity, business or professional group extolling
the virtues of a product and recommending the use
of the product to the public. A product endorsement
from an authoritative figure is a key element in
business advertising and marketing campaigns.
• Competitive advantage – promotion differentiate
your product with your competitors. And provide
edge in business.
Promotions

• A brochure isn’t necessarily the best way of promoting

your business, the problem being that once a brochure
has been printed, the information is fixed. You can’t
change or remove anything should the need arise. A
more cost effective and flexible option might be a folder
with a professionally designed sheet inside, over a series
of your own information sheets can be customized by
varying them to suit the target customers and/or
changing them as required.
Promotions

• Promotion does not just mean

communicating to your customers. It is just
as important to ensure your internal
stakeholder are aware of the value and
attributes of your products. This mean
communicating effectively to your
staff/fellow employees and share expertise
with their customers.
People

Re-present the business. The image they

present can be important Employees
o First contact often human – what is the
lasting image they provide to the
customer
Management
o Extent of training and knowledge of the
product/service concerned Culture
o Mission statement – how relevant
o Do staff represent the Customer Service
desired culture of the
business
Process

• The process of the product is

essential in Marketing. This
determines the capability to
supply the demand of the
consumers.
• Especially relevant to the service
industries
Process

• How do people consume services?

• What processes do they have to go through to
acquire the services?
• Where do they find the availability
of the service?
• Contact
• Reminders
• Registration
• Subscription
• Form filling
• Degree of technology
Physical Appearance

o Physical appearance is the

first distinction of a product.

o A product could be easily

recognized by it’s appearance.
Physical Environment

• Is it smart?
• Is there a run-down?
• Is there potential for an interface?
• Does it offer comfort?
• How are the facilities?
Physical Evidence

o The ambience, mood or physical presentation

of the environment
o Smart/shabby?
o Trendy/retro/modern/old fashioned?
o Light/dark/bright/subdued?
o Romantic/chic/loud?
o Clean/dirty/unkempt/neat?
o Music?
o Smell?
Strategic vs. Tactical P’s
o Product, place and people are
considered as the strategic Ps of
marketing mix since they cannot be
changed overnight.
o Promotions, price, process and physical
appearance are considered as the
tactical Ps of marketing mix because
these can be changed more easily.
Merchandising
•Marketers of consumer packaged goods such as food and
personal care products sold in supermarkets would often add
“Merchandising” as another component of the marketing mix.
•Merchandising aims to extend advertising message at the
point of purchase (POP) by generating superior presence
within the store.
•Many companies uses store signs, posters, price tags, shelf
takers and island displays.
•Companies spend a significant 1% of their sales on
merchandising.
Merchandising
STORE SIGNAGE

ISLAND DISPLAY (Gondolas)

STANDEES

SHELF TALKERS
PRICE TAG FLYERS
Buyer Behavior

Factors Influencing Buyer Behavior in

Consumer Markets

Cultural Factors
Social Factors
Personal Factors
Psychological Factors
Cultural Factors
Culture and sub-culture – Many older Chinese like to eat
Shark’s fin soup as well as Bird’s nest soup, which
environmentalist despise.

Social class – Buying a real estate property is dependent,

among others, on how consumer perceive the quality of their
desired neighborhood and the status symbol that comes with
high-end development.
Social Factors
Reference Group – High-end brands like Nike shoes or acquiring a
Globe celphone to be a member of their Gen Txt Club are examples
of how peers can affect a purchase

Family – demand for products such as PLDT long-distance calls is

influenced by the Pinoy’s strong family attachment

Role and statutes – Mont Blanc pens are positioned as the pen for
presidents of companies, as well as countries. Johnny Walker Label is
another example of whiskey positioned for successful people.
Personal Factors
Age and life cycle – Retirees are the prime market for many luxury
cruises, as it is consistent with the slow, relaxing pace they desire.
Occupation – Pamper Uni are bought by working mothers who cannot
afford to rest in the morning. The International School targets children
of expatriates.
Economic Circumstances – Network marketing offers equal
opportunity to those who want to start and grow their own business
without the large capital involved in putting up traditional
businesses.
Lifestyle – Kraft imported cheese and Lazy Boy chairs are
examples of lifestyle products.
Personality and Self-concept – Premium brands like Rolex, cars
and even clothes are driven by how the buyer looks at himself of
herself
Psychological Factors
Motivation – Many government employees now enroll in
graduate school to gain the competitive advantage
versus their peers in aspiring for a promotion.
•Learning – AMC cookware utilizes demonstration to show
the product’s unique ability to fry chicken without oil, boil
egg without water and cook food simultaneously without
taste transfer using low fire.
•Beliefs and Attitudes – Sony is believed to be a. brand with
a higher quality. Some consumers think that installing
chimes can bring in good luck to homes and offices. A
diamond ring is a must in every engagement and wedding
Assembling the Marketing Mix
Before a marketing mix is formed, there must be an analysis and
definition of target customers.

1. In the Macro level, market segmentation answers the question

“What are the groupings of similar customers?”
2. In Micro level,
• Decision Making Unit (DMU) points to “Who
purchases the product?”
• Decision Making Process (DMP) answers the question
“How, where, and when is the purchase made?”
• Consumer motivation and preferences guides the marketer to
answer, “What does the consumers want and why?”
Important Considerations
In satisfying customers, marketers must not assume who the
decision maker is or the mistake may be costly for the firm.
Marketers must consider the more complex DMU’s that are
usually involved in the decision making process (DMP) for most products
and services.
Marketers must therefore consider the initiator, influencer, decider, buyer
and the user for every purchase – not just the user.
The general characteristics of the firm’s marketing mix is shaped by the
target market’s preparedness to adopt a product.
Marketers usually make use of several market researches to understand
their customers better. One of the most popular and widely used market
research report is called Usage, Attitude and Image (UAI) survey.
Product Value

Products may either be superior, at par with (the same),

or basic to those competition.
A superior product satisfies more needs and wants of
customers while a basic product satisfies lesser needs.
While our initial tendency is to think that consumers
enjoy superior products all the time, we must realize that
products with less features may still be desired by the
lower income consumer segment.
Product Quality
In the Philippines for instance, some 92% of our nationwide
population belongs to the lower income D and E class and these
“consumers” may be looking for very basic products.
The new definition of “Quality” is that which conforms to
consumer’s specification, measured through indicators of
customers satisfaction, rather than indicators of self-gratification.
It is consumers who decides on quality not the company.
After product quality is defined, it’s inseparable twin, price, is
defined to ensure an appropriate product value.
Marketing Program
After product value is formulated and acceptable to the target customers,
marketing programs are then assembled by identifying which of the marketing
mix component should logically be the main weapon and which should be the
support strategy.

Product Program
Value (Marketing)
(Competitiveness)
Distribution-driven

Some companies are distribution-driven, meaning, their product must

be available when and where customers expect them to be. Their
location are the single most important factor in their business.
Selling-driven

Some companies are selling driven especially when

products are only available through the salesman.
Sales Promo-driven
Other companies that are sales promo driven are fast
food parlors like Jolibee and Mc Donalds which have at least eight
major promo campaign yearly to bring back consumers to the store
as often as possible.
Price-driven
Makro is a price-driven brand. Without any fancy display, Makro boasts of
rock-bottom prices everyday, which attract people to visit the hypermarket.
Advertising-driven
Coke is advertising-driven. It intends to be top-of-mind in the soft drinks
industry as it constantly reminds consumers of the different usage occasions
for Coke. Its ad-driven strategy is supported with a heavy distribution effort,
sales promo support and parity pricing with competition.
Diagnostic Marketing Mix
Diagnostic marketing mix entails the matching of correctly-defined marketing
problems with the proper marketing solution.

Marketing Problem Marketing Solution

Low awareness level Advertising

Low Availability Placement

Low Trial Rate Pricing and/or Promotions

Low Repeat Purchase Product/ Service

Quality
Diagnostic Marketing Mix
The marketing mix of a company seldom stays the same.
Marketers must therefore have a systematic way of reviewing what worked and why,
what didn’t work and why.
Answering these queries are a prerequisite before planning what should be added or
what should be dropped in order to attain, enhance or maintain competitive edge.
Competitive Advantage
Competitive advantage is secured by providing better or best value in
the perception of the customer, relative to all your competitors.
A company’s capabilities can become a true competitive advantage if
the following 5 criteria are met:

1. It is valuable in the marketplace

2. It is superior in the marketplace
3. It is difficult to match or imitate
4. It is difficult to substitute
5. It is difficult to trade and gain
Marketing Plan
The marketing mix is actually the heart of an important
company document called the marketing plan, which outlines
how the company intends to grow in the marketplace and win
against competition.
The marketing plan is usually formulated annually, but results
are reviewed monthly.
 Format of a Marketing Plan
• Executive Summary • Market Segmentation
• Business Review (performance of the • Marketing Objectives and Goals
previous years) • Marketing Strategy
• Environmental Analysis • Product Positioning
• Key Factors for Success • Customer Satisfaction Strategy
• Preferred Brand Strategy
• Strengths and Weaknesses Analysis
• Contingency Plan
• Threats and Opportunities Analysis • Marketing Budget
• Marketing Implementation Guide
• Appendix
4S’s of a Marketing Plan
The marketing mix can change over time. However, all
marketing programs must be able to meet the 4 basic
criteria to be considered a diligently thought-out campaign

1. Sufficiency – the marketing mix must be able to

adequately meet the defined marketing objectives.
This means ambitious growth objectives would
naturally need the corresponding heavier investment
in marketing support programs.
4S’s of a Marketing Plan

2. Selective – the marketer must be able to consider all

potential alternatives of each marketing mix before short-
listing all possible combinations of the marketing
mix that can meet their marketing objectives.

The one that can provide the best profitability is the one
logically to be chosen. This is not easy as there are literally
millions of combinations. But the least the marketing man
can do is to short list the more obvious one and apply due
diligence in planning each possible option.
4S’s of a Marketing Plan

4. Synchronize – when the marketing mix is selected, the

different elements must combine harmoniously forthe brand
become successful. For example, a marketer cannot choose
to invest in heavy advertising of a low quality product sold on
a high price. In such a case, the elements of the marketing
mix is not logically synchronized.

4. Sustainability – the marketing mix that is finally chosen

must be able to last in the long term vis-à-vis competition. For
instance, a lower price strategy not only risks a price war but is
not sustainable unless the firm is the cost leader in the
industry.