MM Midterm

Four Ps of Marketing

Product, Price, Place, and Promotion.

Product (Marketing Definition)

Anything that can be offered to a market to satisfy a customer's need or want, including physical goods, services, ideas, experiences, persons, places, or organizations.

Physical Goods

Tangible products that customers can see, touch, use, and own.

Services

Intangible activities, benefits, or experiences offered to customers that generally cannot be touched or stored.

Ideas (in Marketing)

Concepts or messages offered to influence people's attitudes, beliefs, or behaviors.

Experiences (in Marketing)

Offerings designed to create memorable feelings, activities, or interactions for customers.

Customer Value

The perceived benefits customers receive compared with the costs or sacrifices made to obtain a product.

Customer Needs

Basic human requirements, problems, or conditions that customers seek to satisfy.

Customer Wants

Specific forms that basic needs take based on individual preferences, culture, lifestyle, and personal circumstances.

Three Levels of a Product

Core Benefit, Actual Product, and Augmented Product.

Core Benefit

The fundamental problem-solving benefit or value that a customer is buying when purchasing a product.

Actual Product

The tangible or observable product that delivers the core benefit, including brand name, quality, design, features, and packaging.

Augmented Product

Additional services and benefits built around the core benefit and actual product, such as warranties, delivery, installation, and support.

Product Quality

The ability of a product to perform its intended functions and meet or exceed customer expectations.

Product Features

Specific characteristics or functional attributes of a product that provide benefits to users.

Product Design

The total process of developing a product's appearance, functionality, usability, and overall customer experience.

Two Main Product Classifications

Consumer Products and Industrial Products.

Four Types of Consumer Products

Convenience products, Shopping products, Specialty products, and Unsought products.

Convenience Products

Consumer products bought frequently, immediately, and with minimal comparison or buying effort.

Shopping Products

Consumer products that customers carefully compare on suitability, quality, price, and style before purchasing.

Specialty Products

Consumer goods with unique characteristics or brand identification for which buyers are willing to make a special purchasing effort.

Unsought Products

Consumer products that the buyer either does not know about or does not normally think of buying.

Industrial Products

Products purchased by businesses or organizations for further processing, operations, or use in conducting a business.

Three Categories of Industrial Products

Raw materials, Equipment, and Business services.

Raw Materials

Basic unprocessed materials used in production that become part of the finished product.

Equipment (Industrial)

Durable products used by businesses to assist in production or operational activities over an extended period.

Business Services

Intangible services purchased by organizations to support operations and business objectives.

Product Life Cycle (PLC)

The series of stages a product passes through from its initial market introduction to its eventual decline and withdrawal.

Four Stages of the Product Life Cycle

Introduction stage, Growth stage, Maturity stage, and Decline stage.

Introduction Stage (PLC)

The initial PLC stage when a new product is launched, characterized by low sales, high promotional costs, and limited customer awareness.

Growth Stage (PLC)

The PLC stage marked by rapid sales increase, growing customer acceptance, and entering competitors.

Maturity Stage (PLC)

The PLC stage where sales peak and growth slows down due to market saturation and intense competition.

Decline Stage (PLC)

The final PLC stage where product sales and profits fall due to technological advances, shifting consumer tastes, or substitute products.

Branding

The process of creating and managing a unique identity that distinguishes a product or organization from its competitors.

Brand Name

The vocalized or written part of a brand that customers use to identify products.

Packaging

The activities of designing and producing the container or wrapper for a product.

Five Functions of Packaging

Protecting the product, facilitating transportation, providing information, attracting customers, and supporting branding.

Labeling

The display of printed information on or attached to a product or its packaging.

Product Support Services

Augmented services provided before, during, or after sale to enhance customer satisfaction and build relationships.

Product Differentiation

The process of distinguishing a product from competitors by highlighting unique attributes valued by customers.

Product Modification

Altering an existing product's characteristics (quality, features, or design) to maintain competitiveness.

Product Line

A group of closely related products offered by a single company that perform similar functions or target similar markets.

Product Mix

The complete assortment of all product lines and individual items offered for sale by a business.

Product Innovation

Developing entirely new products or significantly improving existing products to provide superior customer value.

Price (Marketing Definition)

The amount of money charged or value exchanged by customers to obtain the benefits of a product or service.

Unique Characteristic of Price in the 4Ps

It is the only element in the marketing mix that directly generates revenue; all other elements represent costs.

Five Roles of Price in Marketing

Generates revenue, influences customer demand, affects profitability, creates market positioning, and communicates product value.

Six Factors Affecting Pricing Decisions

Cost of the product, customer demand, competition, target market characteristics, economic conditions, and government regulations.

Six Common Pricing Objectives

Profit maximization, sales growth, market share growth, survival, maintaining market position, and product-quality leadership.

Cost-Plus Pricing

A pricing strategy that adds a standard markup to the total cost of producing or acquiring the product.

Cost-Plus Pricing Formula

$$\text{Selling Price} = \text{Cost} + \text{Markup}$$

Competitive Pricing

Setting price points based on the prices charged by major competitors.

Penetration Pricing

Setting a low initial price for a new product to attract a large number of buyers quickly and gain market share.

Price Skimming

Setting a high initial price for a new, innovative product to skim maximum revenues layer by layer from the market.

Psychological Pricing

Pricing that considers the emotional or psychological impact of prices on consumer perception (e.g., pricing at ₱99 instead of ₱100).

Promotional Pricing

Temporarily pricing products below list price (or below cost) to create buying urgency and short-term sales demand.

Perceived Value

The customer's subjective evaluation of product benefits relative to its price.

Price-Quality Relationship

The consumer tendency to rely on price as an indicator of product quality when details or experience are limited.

Reference Price

A benchmark price that buyers carry in their minds and refer to when evaluating a specific product's price.

Price Fairness

The buyer's perception of whether a price or price change is reasonable and justifiable.

Place (Marketing Definition)

The marketing mix element focusing on distribution activities required to make products accessible to target customers.

Distribution Channel

The chain of individuals or organizations through which a product passes from producer to final consumer.

Direct Distribution

A distribution channel structure with no intermediary levels; the producer sells directly to consumers.

Indirect Distribution

A channel structure containing one or more intermediaries (wholesalers, distributors, retailers) between producer and consumer.

Three Major Intermediaries

Wholesalers, Distributors, and Retailers.

Wholesaler

An intermediary that buys goods in large bulk quantities from producers and resells them to retailers or businesses.

Distributor

An intermediary that helps manage movement and distribution of products to various market outlets or sellers.

Retailer

A channel intermediary that sells products directly to final end-user consumers.

Three Main Distribution Strategies

Intensive distribution, Selective distribution, and Exclusive distribution.

Intensive Distribution

Stocking the product in as many retail outlets as possible to maximize availability.

Selective Distribution

Using more than one but fewer than all available outlets to sell goods, maintaining moderate control.

Exclusive Distribution

Giving a limited number of authorized dealers the exclusive right to distribute the product in specific territories.

Physical Distribution Channels

Brick-and-mortar locations (stores, outlets, markets) where customers physically inspect and buy products.

Online Distribution

Digital sales channels like e-commerce websites, mobile apps, and online marketplaces.

Omnichannel Distribution

Integrating physical and digital channels to provide a seamless, unified shopping experience across all customer touchpoints.

Promotion (Marketing Definition)

Activities that communicate product information, benefits, and value to target customers to persuade them to buy.

Five Objectives of Promotion

To create awareness, provide information, persuade customers, remind customers, and build brand image.

Promotional Mix

The specific combination of communication tools a company uses to pursue its advertising and marketing goals.

Five Major Elements of the Promotional Mix

Advertising, Sales Promotion, Personal Selling, Public Relations, and Direct Marketing.

Advertising

Any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor.

Sales Promotion

Short-term incentives to encourage the immediate purchase or sale of a product or service.

Personal Selling

Personalized, face-to-face or direct presentation by a sales force to build relationships and close sales.

Public Relations (PR)

Building good relations with the company's various publics by obtaining favorable publicity and building a positive corporate image.

Direct Marketing

Direct communications with targeted individual consumers to obtain an immediate response and cultivate long-term relationships.

Four Common Promotional Message Appeals

Informational appeal, Emotional appeal, Rational appeal, and Social appeal.

Digital Promotion

Using internet-based channels and platforms (social media, websites, email) to engage target consumers.

Social Media Marketing

Creating and sharing content on social networks to achieve marketing and branding goals.

Content Marketing

Creating and distributing valuable, relevant, and consistent content to attract and retain a clearly defined audience.

Influencer Marketing

Partnering with influential individuals who have dedicated social followings to promote products or services.