The 7Ps

THE MARKETING MIX: The 7Ps of Marketing

It is a widely accepted strategic marketing tool that combines the 4Ps (product, place, price, promotion) with the additional 3Ps-people, packaging and positioning.(Jerome McCarthy) Purpose of the 7Ps Model: Set clear marketing objectives Come up with marketing strategies and tactics Plan a successful product offering

PRODUCT

A product is any physical good, service, or idea that is created by an entrepreneur or an innovator in serving the needs of the customers and addressing their existing problems. The three-level concept of products/services: Level 1: Core Benefits of the Product or Service Level 2: Physical Characteristics of the Product or Service Level 3: Augmented Benefits of a Product or Service

PLACE

The refers to the physical and human characteristics of a spot on the map. A strategic place depends on nature of the business and the primary target market. The also covers the product distribution and the whole business logistics.

PRICE

Price is the peso value that the entrepreneur assigns to a certain product or service after considering its costs, competition, objectives, positioning and target market. It is the only P in the 7Ps that generates revenue for the business.

COMMON PRICING STRATEGIES

[Main Topic]

BUNDLING

This refers to two or more products or services in one reduced price.

PENETRATION

This refers to setting low prices to increase market share, but the entrepreneur will eventually increase the price once the desired market share is achieved.

SKIMMING

This is the opposite of penetration pricing where prices are initially high and then they are lowered to offer the product or service to a wider market.

COMPETITIVE

This refers to benchmarking prices with the competitors.

PRODUCT LINE

This refers to pricing different products or services within a parallel product array using varying price points.

PSYCHOLOGICAL

This considers the psychology and positioning of price in the market.

PREMIUM

This refers to setting a very high price to reflect elitism and superiority.

OPTIONAL

This refers to adding an extra product or service on top of the original to generate more revenue.

COST-BASED/COST-PLUS

The basis of markup is the cost of sales.

CLASSIFICATION OF COSTS

[Main Topic]

Variable or Controllable Costs

These costs are directly proportional to the number of products manufactured or to the number of services performed.

Fixed or Uncontrollable costs

These are costs not directly proportional to the manufacturing of a product or to the performance of the service.

PROMOTION

Promotion involves presenting the products or services to the public and how these can address the public’s needs, wants, problems or desires. Strong IMC Plan (Integrated Marketing Communication) should be devised to deliver compelling messages effectively. Key marketing messages for promotion can be: 1. Value proposition or USP 2. Product or service image 3. Business Image 4. Business Values and Philosophy

Some Promotional Tools

[Main Topic]

Advertising

This is a type of communication that influences the behavior of a customer to choose the product/service of the entrepreneur. Objectives: 1. Informing, educating and familiarizing the public with the product you offer. 2. Building a trustworthy image 3. Increasing sales Some advertising tools: 1. Television 2. Radio 3. Internet 4. Mobile phones 5. Print 6. Out-of-home

Selling

This is the act of trading a product or service for a price or a fee. (cold calls, consultative selling, direct selling, persuasive selling)

Sales promotions

These are short-term promotional gimmicks wherein practical incentives and appealing activities are incorporated. Also known as “below-the-line” promotions. (Sales discounts, Raffles, Contest and games, Promo Items, Product or service bundles, trade fair, rewards)

Public relations

These are image-building initiatives of the entrepreneur to make the business reputable to the public. (Press conference, Launching events, charitable events, blogs, social media)

PEOPLE

play a vital role in servicing customers even though the entrepreneur sells only physical goods.

PEOPLE

1. Focuses on the role of human resources in propelling the business growth of the business. 2. Direct, personal interactions, people involved in producing the product and service. 3. CRM (Customers Relationship Management) pertains to the philosophy and a set of strategies, programs and systems that focuses on identifying and building customer loyalty (valued customers)

CONTRACT

agreement between two or more people, which creates an obligation to do or not to do (in exchange for money of some other consideration.)

PACKAGING

is how the product or service is presented to customers. It is the overall identification of the product or service "Servicescape"-Boom & Bitner

PACKAGING

Product Packaging Design refers to the creation of the exterior of a product. Product Labelling is important in packaging for protection of the goods and the safety of people handling them. QUESTIONS IN DESIGNING THE PACKAGING OF A PRODUCT: 1. What is the product? 2. Who is buying the product? 3. How are people buying the product?

Product Packaging Design

refers to the creation of the exterior of a product.

Product Labelling

is important in packaging for protection of the goods and the safety of people handling them.

POSITIONING

Defines where your product (item or service) stands in relation to others offering similar products and services in the marketplace as well as the mind of the consumer.

PROCESS

Standard procedures or systems involving internal marketing-related activities and external marketing related activities.

BRANDING

A brand is the name or symbol associated with the product or service offering that communicates messages to target customers. The brand message can be channeled through way of advertising, distribution and packaging When a brand name is doing its job, it evokes positive images or emotions in consumers.That is why a brand name is valuabl