Precise Marketing Mix

Marketing Mix

  • A widely accepted strategic marketing tool.

  • Combines the original 4Ps with the additional 3Ps in formulating marketing tactics for a product or service.

Purpose of Creating the 7Ps Model

  • For conducting situation analysis.

  • For setting objectives.

  • For conducting a Strength, Weakness, Opportunity, and Threat (SWOT) or competitive analysis.

Product / Service

  • What product or service is the most appropriate for the opportunity, and why will customers buy or avail them?

  • It is any physical good, service, or idea that is created by an entrepreneur or an innovator in serving the needs of customers and addressing their existing problems.

Three-Level Concept of a Product

  • Level 1: Core Benefits of the Product or Service

  • Level 2: Physical Characteristics of a Product or Service

  • Level 3: Augmented Benefits of a Product or Service

Level 1: Core Benefits of the Product or Service

  • These are NOT tangible physical products.

  • These are the major factors why a customer buys a product or avails of a service.

Level 2: Physical Characteristics of a Product or Service

  • It is the second layer of selection once the core benefit has been satisfied and opinions are available to the customers.

  • Examples: better packaging for products or a better physical evidence or customer service experience for services.

Level 3: Augmented Benefits of a Product

  • These are only additional benefits; a customer will still get the core benefits of a product or service even without the augmented benefits.

Place

  • Refers to a location or the medium of transaction.

Cyber Location

  • The entrepreneur must use web analytics data to understand website performances.

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.

Most Common Pricing Strategies

  • Penetration Pricing: Setting low prices to increase market share, but eventually increasing the price once the desired market share is achieved.

  • Skimming: Prices are initially high and then lowered to offer the product or service to a wider market.

  • Cost-plus pricing: The markup is based on a certain percentage of cost.

  • Cost-based pricing: The basis of markup is the cost of sales.

  • Bundling: Two or more products or services in one reduced price.

  • Competitive pricing: Benchmarking prices with the competitors.

  • Premium pricing: Setting a very high price to reflect elitism and superiority.

Promotion

  • What is the most effective advertisement or combination of advertisements, and which advertising tool should be used to drive awareness and increase sales?

  • Involves presenting the product or services to the public and how these can address the public's needs, wants, problems, or desires.

  • Main goal: gain attention.

Promotional Tools

  • Advertising:

    • Influences the behavior of a customer to choose the product or service of the entrepreneur over the other competitors.

  • Selling:

    • An act of trading a product or service for a price or a fee.

  • Sales promotions:

    • Short-term promotional gimmicks where practical incentives and appealing activities are incorporated to entice the customers to buy the product or avail of the service.

    • Also called “below-the-line” promotions.

  • Public relations:

    • Image-building initiatives of the entrepreneur to make the name of the business reputable to stakeholders, such as the target customers, government agencies, business partners, media, and the public.

    • Unlike advertisements, public relations do not directly promote products or services.

    • Examples: press conferences, lobbying, launching events, web public relations, social responsibility events.

People

  • One of the 3 additional P’s in the marketing mix.

  • Plays a vital role in servicing customers.

  • Have a major influence in the customer’s buying behavior.

Packaging/ Physical Evidence

Packaging

  • It is the overall identification (look and feel) of the product or service.

  • It preserves the shelf life of the product or service.

Packaging Elements

  • Color

  • Shape

  • Materials

  • Font and text

  • Graphics

Physical Evidence

  • Servicescape:

    • It refers to the overall ambiance of the place where the service is performed.

Process

  • What is the most compelling feature of the product or the business that will make a difference in the lives of the customers?

  • What sets the product or service apart from the rest?

  • It is the step-by-step procedure or activity workflow that the entrepreneur or employees follow to effectively and efficiently serve customers.

  • Components of process:

    • Input

    • Throughput

    • Output