2. Marketers communicate a value
proposition using the marketing mix.
7Ps of marketing mix:
• Product
• Price
• Place
• Promotion
• People
• Process
• Physical Evidence
3. What is product?
• Product- a good, service, idea or
experiences that satisfies the needs
of the target market.
– Good- is a product with tangible attributes such
as it can be seen, touched, and etc.
– Service- is an intangible activity or benefit.
– Experiences- are less tangible, but can represent
a competitive differentiating feature for the
product.
4. Product Decision
1. Features and Characteristics.
-It includes designing how
the product will look and the
quality standard by which it will
be produced.
Characteristics:
• Size
• Color
• Weight
• Durability
• Maintainability
• Product benefits
5. Product Decision
2. Product Line and Product
Mix
• Product Line- is a subset of
the product mix.
• Product Mix- is the group of
everything a company sells
6. Product Decision
3. Branding
• referred as the name,
symbol (logo), design or
combination that identifies
a product from its
competitors.
7. Product Decision
4. Packaging and Labelling
Packaging- refers to the container or wrapper
that holds a product and may include an outer
box or other container to protect it from
damages or deformity.
- it serves as security and safety function
Label- provides descriptions or information
about the product and can serve several
functions
8. What is Place?
• Place relates to how your
product accessible to your
target market. A marketer
chooses the location or
location in which to place or
distributed their products
that enables customers to
purchase it at a time and
place convenient for them.
10. Direct Distribution
• House- to-house distribution - The marketers hires seller who
go through neighborhoods and offer their products for sale to
household.
• Setting up a stall or store - that customers go to in order to
purchase the marketer's products.
• On the internet - through a company-managed website or
social media account.
11. Indirect Distribution
• The marketer sells their products through other seller, also
known as intermediaries.
• Intermediaries - This intermediaries allow the marketer to
reach a greater number of customer by purchasing the product
from the market and reselling it for them.
12.
13. Intermediaries
° Retail are intermediaries who sell to customers.
Ex. Intermediaries includes supermarket, sari-sari
Stores, bookstores, hardware store etc.
°Wholesalers are intermediaries who sell to other
intermediaries such as retailers or restaurants, an institution that
purchase products in larger quantity.
14. Hybrid Distribution
• There are instances when a marketer may choose both direct
and indirect distribution method.
15. What is Promotion?
• The purpose of promotion is to inform, persuade, and remind
customers of a brand’s value.
16. Types of Promotion
• Advertising
• Personal Selling
• Sales Promotion
• Digital Marketing
• Public Relation (influencer)
17. Price
• refers to the value placed by the customers on a product as
well as that a company gets in return.
• Price is the only P that produces revenue and has a direct
impact on profitability
18. Some terms:
• Selling price (final price) – The amount your customer pays in exchange
for the product you sell. (Unit Cost + Mark up)
• Revenue (Halin) – The total amount you collect as a result of selling your
product.
• Fixed cost – (also referred to as Overhead) these are costs that remain
constant regardless of the number of goods produced or sold in a given
period. (gasto nga walay labot sa production)
• Variable cost – these are costs that go directly into the manufacture of a
good and can. (gasto nga naay labot sa production)
• Total cost – these are your combined fixed and variable costs incurred in
the production of goods or the creation of services. (FCU + VC)
19. Some terms:
• Unit cost – This is the cost of producing one unit of the
product. (Total cost/number of units produce)
• Profit (ginansya)– This is the amount you earn as a result of
your selling activities.
• Breakeven point (bawi lang)– It is the quantity of products
sold where revenue and total costs are equal.
20. Determining Selling Price
• There are several methods for determining selling price:
– Cost Oriented Pricing
– Target Profit Pricing
– Competition Based Pricing
– Value Based Pricing
21. Determining Selling Price
• Cost Oriented Pricing
This method uses cost as the basis for pricing products. There are two
ways to go about pricing using this orientation:
a. Cost-plus Pricing - involves adding a markup to the cost of goods and services to
arrive at a selling price
b. Standard Markup Pricing – just adding a standard mark up to the product
22. Cost-plus Pricing
• If the objective is to earn 10 pesos for every glass of iced tea
sold, the price is computed as:
Selling Price = Unit Cost + P10
= 20 + 10
= 30 pesos
23. Cost-plus Pricing
• To illustrate, let us look at the example of a retail store selling shoes in
Makati City. Let us assume that the company buys the shoes for PHP 150
per piece (cost of goods) from a Marikina supplier: Overhead costs for
maintaining the store are estimated at PHP 50,000. The entrepreneur
expects to buy and sell 1,000 units, which translates to a unit overhead
cost of PHP 50 per shoe. He adds PHP 50 for profit, resulting in a final
price of PHP 250. If he buys and sells only 500 units, however, the unit
overhead becomes PHP 100. This brings his total cost to PHP 250 (i.e.,
PHP 150 variable cost + PHP 100-unit overhead) If he wants to keep the
PHP 50 profit for every shoe, then he must raise his price to PHP 300.
24. Standard Markup Pricing
• If your desired markup is 75%, then your selling price is:
Selling Price = Unit Cost + (Unit Cost x .75)
= 20 + (20 x .75)
= 20 + 15
= 35
25. Determining Selling Price
• Target Profit Pricing
This method determines price based on the profit you want to earn form the selling
activity.
Selling Price = (Target Profit + Total Cost)/Expected Unit Sales
= Target Profit + [Fixed Cost + (Variable Cost x Unit Sales)]
Expected Unit Sales
26. Determining Selling Price
• Target Profit Pricing
This method determines price based on the profit you want to earn form the selling
activity.
Selling Price =
6000+[3000+ 10 𝑥 300 ]
300
=
6000+(3000+3000)
300
= 12,000/300
=40
27. Determining Selling Price
• Competition-based Pricing
This method uses competitor’s prices as the basis for
determining your own price. A scale called comparative price
index is helpful in choosing your pricing strategy.
Product Price Index
Milkshake 120 1.0
Milk tea 100 0.83
Fresh fruit smoothie 85 0.71
Buko juice (bottled) 60 0.50
Iced tea 40 0.33
Instant fruit juice 40 0.33
28. Determining Selling Price
• Value-Based Pricing
In value-based pricing, prices are based not on cost, but on
the customer’s perceptions of value.
29. Steps in Preparing the Marketing Plan
• Developing Marketing Strategy and Action Programs
– Price
In pricing the
product is should
also be value-
based
Why some
customers willing to
pay much more for
a product such as
Apple’s iPhone?
30. Determining Selling Price
In pricing the
product is should
also be value-
based
Why not MyPhone,
when it’s more
affordable?
31. Determining Selling Price
In pricing the
product is should
also be value-
based
Because iPhone
has several product
features that the
MyPhone does not
have.
32. Determining Selling Price
– Price
In pricing the
product is should
also be value-
based
“Intangible benefits”
(pogi points,
prestige)
