MARKETING MIX is a set of controllable the sellers at a particular time.
and connected variables that a company
gather to satisfy a customer better than
its competitor. It is also known as the b. Owned-goods services- are
“Ps” in marketing. Marketing mix is a set the repair and maintenance
of actions an entrepreneur takes to build services rendered by the sellers
and market its product to its customers. to the products of the customer.
It helps to make sure that you can offer
your customers the right product at the
right time and the right place for the c. Non-good service- is personal
right price. service on the part of the seller.
FOUR GENERAL TYPES OF PRODUCT:
1. PRODUCT
1. Breakthrough products These
Marketing strategy typically starts products offer completely new
with the product. Marketers can’t plan a advantages. They may create a new
demand. They may cater to a peculiar
distribution system or set a price if they
set of customer needs that have not yet
don’t know exactly what the product will been tapped. Marketing breakthrough
be offered to the market. products need a higher level of customer
education and orientation.
Product refers to any goods or services
Common examples of breakthrough
that are produced to meet the
products are borne out of the
consumer’s wants, tastes, and
biotechnology field particularly in terms
preferences.
of coming up with new vaccines to
It will be for the satisfaction
protect from people from certain viruses
of the group for the target
like Corona Virus Disease.
market, and it must be
2. Differentiated products These
specific, identified from the
products try to claim new space in the
others, and easily be
mind of the customer different from the
recognized.
spaces occupied by existing products.
It is anything that can be
The performance benefits may be close
offered to a market to satisfy
to existing products but there would be
the desire or need of a
additional benefits on special aspects of
customer.
the product.
A product is generally
Examples are cameras that can take
categorized as tangible
pictures in ground and underwater.
goods, but it can also be
3. Copycat products Sometimes called
intangible services.
look alike products will not make much
conception on the consumer’s mind.
2 MAIN TYPES OF PRODUCTS Aggressive advertising may add to
market demand but at a greater cost
1. Goods- are tangible products that than the leading brands. The marketer
can measure satisfaction with results or should apply different strategies by
evidence as manifested through offering lower prices more physical space
physical development. in the shelves, easier access and
promotional freebies.
a. Durable goods are physical
products that use over a long time. 4. Niche products. They are products
b. Non-durable goods are the with lower reach, lower transparency and
physical products that are quickly and lower prices. They play minor roles in
easily consume specific and smaller market segment.
Examples are particularly expensive and
high-quality coffee and customizable
2. Services- are intangible products that products, like toys which can be
satisfaction can be measured in future individually tailored for children.
preferences.
a. Rented-goods services- are CLASSIFICATIONS OF CONSUMER
the consumer rented facility of PRODUCTS
Consumer products- these are
goods and services produced for the
final consumer for personal, family, or
household use.
3. Generic/Core Product - emphasizes
the impact of the product on the
Convenience product- is purchased customer, not on the seller.
with a minimum or less effort because These products are named only by
the buyer knows product their Basic product type, and
characteristics before shopping. not on the individual brand.
Many stores carry generic
products for lower prices than goods with
Staples are low-priced items that are brand names.
routinely purchased regularly and
used every day. 2. PLACE
Place represents the location where the
buyer and seller exchange goods or
Unsought products products are services. It is also called the distribution
the items that the consumer does not channel. It can include any physical store
plan to buy. These are items that are as well as virtual stores or online shops
purchased when a sudden problem on the internet.
has to be solved. Channel of Distribution - Is made
up of people or organizations
involved in the distribution process.
Shopping Products- these are items
for which buyers are willing to spend
considerable effort in planning and Direct Channel Distribution – Is the
making a purchase, these products transfer or movement of goods and
also have little purchase locations and services from manufacturer to final
buy less frequent. user or customer without the
intervention of an independent
middleman.
Specialty Products these are items
for which there are no acceptable
substitute in the consumers’ mind.
They possess one or more unique
characteristics where a significant The Indirect Distribution of Channel
group of buyers is willing to expend - Is the transfer or
considerable effort to obtain them. movement of goods or tangible
Industrial Products- these are products and services or
goods or services purchased for intangibles goods from
use in the production of other manufacturers or producers to
goods or services. independent intermediaries to
Goods can be categorized into business customers.
goods or consumer goods.
3 LEVELS OF PRODUCT In the marketing mix, the process of
moving products from the producer to
the intended user is called place. In
other words, it is how your product is
1. Tangible/Actual Product - It can be bought and where it is bought. This
perceived by seen and touch. movement could be through a
combination of intermediaries such as
distributors, wholesalers and retailers.
STAGES OF DISTRIBUTION CHANNEL
2. Augmented Product - it includes the
image and service features of a certain
entity.
1. Image and location conditions.
Channel 1 contains two stages between This refers to the physical look of a
producer and consumer – a wholesaler location, sanitary conditions, crime and
and a retailer. A wholesaler typically safety levels. The reputation of a location
buys and stores large quantities of is also important.
several producers’ goods and then
breaks into bulk deliveries to supply
retailers with smaller quantities. For 2. Exact fit to target customers. This
small retailerswith limited order will answer if the location traffic
quantities, the use of wholesalers makes generally composed of your target
economic sense. customers.
Channel 2 contains one intermediary. In 3. Clustering of competitor
consumer markets, this is typically a establishments. This oftentimes results
retailer. A retailer is a company that buys in drawing bigger market to the location.
products from a manufacturer or 4. Future area development. A certain
wholesaler and sells them to end users or location might not have the most
customers. In sense, a retailer is an customers or the best economics in the
intermediary or middleman that short term, but it might become central
customers use to get products from the business hub within the next five years.
manufacturers. Watch out for signs of development like a
construction boom or a new shopping
Channel 3 is called a “direct-marketing” mall nearby.
channel, since it has no intermediary
levels. In this case the manufacturer sells 5. Fiscal and regulatory
directly to customers. requirements. An entrepreneur would
want to set up shop in a town or city
What is the right location? within low tax rates, good governance,
The right location refers to that one excellent infrastructures, and great
which will bring the highest possible public services. Marketing is
benefits to the firm. The wrong location is communicating the value of a product,
one which will bring the most service or brand to customers, for the
disadvantages to the small business. purpose of promoting or selling that
product, service or brand.
Although finding a good location proves
to be challenging, even more challenging
is maximizing the potentials of that LESSON PRICE AND PROMOTION
location.
The price is a serious component of
In finding a good location, one needs to marketing mix. Price is the value of
consider the following: money in exchange for a product or
1. The number of customers residing or service. It is the amount or value that a
working in the area, and the number of customer gives up to enjoy the benefits
customers who frequently pass through of having or using a product or service.
the area. Pricing Policies
2. The density or number of customers
per unit area. There are several pricing policies that
3. The access routes to alternative can be adopted by leading firms. These
locations and their traffic count in those includes:
routes.
4. The buying habits of customers or 1. Cost-Plus Pricing.
where they buy, at what time and how This is the most commonly used
frequent. pricing method. Here, management
5. Locational features such as parking determines first the cost of the goods
spaces, foot access, creature comfort, and incidental expenses, and finally adds
and the like. its desired profit percentage to arrive at
the selling price. This method is simple
In addition to the above factors, the final and straightforward. This selling price
choice of location must be based on the can easily be computed
following:
2. Flexible Mark-up Method.
This is a special form of cost-plus competitors, or maybe more depending
pricing. It calls for a mark-up that is on its ability to convince consumers to
variable depending on the basis of purchase and patronize its product.
several considerations instead of a
constant margin. This can be described Cost plus pricing method calls for
as the difference between the selling adding a percentage of cost on top of the
price and the cost. It can also be total cost. The added percentage
expressed as a percentage (%) of cost constitutes the profit margin, while total
price. costs represents the direct costs and the
overhead costs.
3. Less-Than-Cost Pricing.
This pricing method is based on the The formula adapted, is as follows:
theory that it is desirable to sell goods at Price = direct costs + overhead costs +
prices below the cost. It is sometimes profit margin where direct costs =
known as the materials + labor;
market-minus price policy. This is used if
there is a need to dispose products as Overhead costs = a share of fixed
fast as it can be done. This supports the indirect costs;
belief that it is better to lose 25% than
not to be able to sell at all and as a result Profit margin = a fair amount of return
incur a 100% loss. Example:
If direct costs of a certain product is
4. Perceived-Value Pricing. ₱750.00, overhead costs is ₱250.00 and
This pricing method is set by profit margin is 25% of total cost, the
businessmen by simply estimating how following will be derived:
many people are willing to pay for the Price = direct costs + overhead costs +
products. This is usually done when 25% of (direct costs + overhead costs)
pricing items or other goods that people = ₱750.00 + ₱250.00 + 25%
buy based on what they perceived is the (₱750.00 + ₱250.00) = ₱1000.00 +
value of the product. If the consumers ₱250.00
think that the value of the product is = ₱1250.00
high, then they will pay a high price for
it.
Price Tag Requirement of the
5. Price Maintenance. Consumer Act of the Philippines
This pricing policy believes in price (R.A. 7394) who regulates he pricing
stability. It adheres to the set price that of products/services.
has been charged in the past. Whenever
feasible and competitive, prices are kept Article 81. Price Tag Requirement
as is. The status quo is maintained. of the Consumer Act of the Philippines
(R.A. 7394) regulates the following on
6. Breakeven Pricing. pricing, it says it shall be unlawful to
In this type of pricing policy, the offer any consumer product for retail sale
company first determines the breakeven to the public without an appropriate price
point of the product. Using this data, the tag, label of marking publicly displayed
company can find out how much the to indicate the price of each article and
selling price will be to gain its desired said products shall not be sold at a price
profit. higher than that state therein and
7. Sealed Bid Pricing. without discrimination to all buyers:
In this kind of pricing policy, price is provided, That lumber sold, displayed or
determined based on the contract bid. offered for sale to the public shall be
Examples of this type of pricing are found tagged or labeled by indicating their own
in government biddings where contracts the price and the corresponding official
are farm out ideally through an objective name of the wood: provide, further, That
and fair process. if consumer products for sale are too
small or the nature of which makes it
8. Competitive Pricing. impractical to place a price tag there on
This kind of pricing policy is based on price list place up the nearest point
competitors’ prices. Under this kind of where the products are displayed
system, the firm will change indicating the retail price of the same
approximately the same prices as the may suffice.
Article 82. Manner of Placing Price places, and ideas transmitted
Tags. Price tags, labels or markings must through various media.
be written clearly, indicating the price of An example is Sponsorship.
the consumer product per unit is pesos
and centavos.
Article 83. Regulation for Price Personal Selling – Involves oral
Tags Placement. The concerned communication with one or more
department shall prescribe rules and prospective buyers by paid
regulations for the visible placement of representatives to make sales.
price tags for specific consumer products Examples: Face to Face, Telephone,
and services. There shall be no erasures Emails, and Video/Web Conferencing.
or alterations of any sort of price tags, Sales Promotion – Involves paid
labels or markings. marketing communication
activities that stimulate consumer
PROMOTION purchases and dealer
It is any form of communication that effectiveness.
use to inform, persuade, and remind
people about an organization or Examples:
individual's goods, services, image ideas, Buy one Take one, Bodega sale, and
community involvement, or impact on Discounts Coupons.
the society.
Promotional Mix - It is a combination of
the strategies to accomplish the
promotion objectives of an organization.
Promotional Mix tools - It refers to the
entire set of activities, which
communicate the products, brand, or
service to the user.
Elements of Promotional Objectives
Advertising = Is a paid and non–
personal communication, regarding
goods, services, organizations,
people, places, and ideas that are
transmitted through various media
by business firms, government,
and other non – profit organizations
and individuals who are in some
way identified in the advertising
message as the sponsor.
Examples:
Moving Image like TV, Cinema, DVD, and
YouTube
Print like Newspapers, Billboards,
Magazines, and Direct mails.
Digital like SMS, Podcast, Blogs, Banners,
Social Media and Audio like Radio and
Podcast.
Publicity – Is a non-personal
communication regarding goods,
services, organizations, people,
