2. LEARNING OUTCOMES
Define the meaning of product, price, place, promotion,
people, packaging, positioning and their importance;
Determine the appropriate strategies in pricing,
products, place, promotion, packaging, positioning and
people;
Evaluate how effective the marketing mix to the
organization;
Discuss the product life cycle to create strategies; and
Identify the other P's in marketing.
3. MARKETING MIX
Marketing mix combines controllable elements to
develop a strategy for satisfying the market.
Used by marketers within organizations.
Determines a product or brand's offering.
Includes: product, price, place, promotion,
positioning, packaging, and people.
4. MARKETING STRATEGY
Marketing strategy combines all marketing goals into one
comprehensive plan.
Derived from market research, including surveys, interviews, and personal
observation.
Focuses on the right product mix to achieve goals and objectives.
Basis for formulating a marketing plan.
Utilizes pathways and footholds to make the limited marketing budget more
effective.
Aims to achieve sustainable competitive advantage.
5. Product
A product can be an idea, physical entity (a good), a
service, or a combination of both.
It's the bundle of satisfaction received by the buyer after lease
or purchase.
Includes the physical attributes (form, taste, smell, color,
etc.), function, packaging, labeling, warranty, and
manufacturer's/retailer's services.
6. Product: Its Nature and
Sustainability
Entrepreneurs must grasp the products needed in society to satisfy the target
market.
Products should be clear, unique, and easily identifiable.
Market research aids entrepreneurs in understanding target market needs.
Products can be tangible (goods) or intangible (services, ideas).
Product satisfaction is what buyers experience after lease or purchase.
Includes physical attributes (form, taste, odor, color, texture),
◦ function, packaging, labeling, warranty, and manufacturer/retailer services.
8. Tangible products refer to physical items, including services or ideas,
with specific specifications and offered under a designated description or mod
number.
Augmented Product Includes the image and service features of a certai
entity, emphasizing intangible benefits for the customer.
Examples: Car insurance, Medical and dental benefits, and Fire insurance
Generic Product Emphasizes the impact of the product on the
consumer, focusing on its purpose and primary objective.
Examples: Prestige, Status signal, Professional image
10. TYPES OF PRODUCT (Goods)
Goods are physical products sold from the manufacturer to the
consumer or end user.
They are tangible and can be measured for satisfaction through
physical development or evidence.
11. TYPES OF PRODUCT (Goods)
TYPES OF Goods
◦ Durable goods
Examples include steel, stainless steel, and appliances
◦ Non-durable goods
Example: perishable items, disposable goods, and products
influenced by fashion trends.
12. TYPES OF PRODUCT
(Services)
Services are intangible products that satisfaction can be measured in
future preferences.
Example:
◦ Relaxation in salon and spa
◦ Education from school
14. TYPES OF PRODUCT
(Services)
Rented-goods services
◦ Example: Car rental, space, office for rental
Owned-goods services
◦ Example: Laundry business, car wash
Non-good service
◦ Example: Teacher, accountant, Lawyer, receptionist,
15. CHARACTERISTICS OF
SERVICES
Intangibility is the services that cannot be displayed,
transported, stored, packaged or inspected before
buying.
Variability is when the service is difficult to standardize
because it varies upon the performance of the provider
16. TYPES OF PRODUCT
(CONSUMER)
Consumer product
are goods and services destined/produced for the
final consumer for personal, family, or household
use.
Example: Products normally and routinely used by
consumers..
18. TYPES OF CONSUMER
PRODUCTS
1. Convenience products
Convenience products are bought with minimal effort because
buyers are already familiar with their characteristics.
Consumers typically don't search for information and are willing
to accept substitutes rather than visit other stores.
19. TYPES OF CONSUMER
PRODUCTS
TYPES OF Convenience products
Staples are low-priced items bought regularly for everyday
use.
Examples: rice, soup, toothpaste.
Impulse products are items not planned for purchase,
bought due to factors like attractive promotions or discounted
prices.
Customers are drawn to buy these products impulsively.
20. TYPES OF CONSUMER
PRODUCTS
2. Shopping Products
Shopping products are items that consumers acquire after
gathering knowledge and information to make a final purchase
decision.
Consumers invest effort in searching for information because
these products have prices and are purchased infrequently.
21. TYPES OF CONSUMER
PRODUCTS
TYPES OF Shopping Products
Attribute-based shopping products offer information on
features, performance, options, warranties, and more for
customers to evaluate.
Price-based shopping products assume similar attributes,
and customers seek the least expensive option by comparing
prices.
22. TYPES OF CONSUMER
PRODUCTS
3. Specialty products
Specialty products are items with specific brands and stores
that customers are loyal to.
Customers are willing to exert significant effort to acquire
desired brand units and are willing to pay a higher price
compared to similar products.
24. TYPES OF PRODUCT
(INDUSTRIAL)
INDUSTRIAL PRODUCTS
Industrial products are goods or services bought for use in
the production or manufacturing of other goods, for business
operations, or for resale.
They are categorized based on the degree of decision-
making involved, cost, rapidity of consumption, role in
production, and change in form.
25. They are categorized based on several factors:
Accessory Equipment: Portable goods with a long lifespan,
requiring moderate consumer decision-making.
Raw Materials: Unprocessed basic materials sourced from
extractive and agricultural industries.
Industrial or Operating Supplies: Inexpensive
convenience goods quickly consumed in daily operations, not incorporat
into the final product.
26. Component Materials: Semi-manufactured goods
undergoing further form changes, contributing to product
credibility.
Installations: Expensive, non-portable goods used in
production processes, not integrated into the finished produ
Fabricated Parts: Finished products from other
companies integrated into manufactured products without
further changes in form, providing additional features.
27. Market Research
Market Research is a process involving various
activities to gather and analyze information linking the
marketing organization with its customers.
Purpose:
◦ Identifies information needed for successful product or
service marketing.
◦ Systematically gathers necessary data.
◦ Serves as a foundation for analyzing and interpreting
marketing data.
28. RESEARCH DESIGN MAY BE
QUANTITATIVE OR QUALITATIVE
Research Design Overview:
Quantitative Research:
◦ Involves numerical data analysis.
◦ Utilizes methods such as frequency distribution, descriptive
statistics, and correlation/causation tests.
Qualitative Research:
◦ Doesn't rely on precise measurements.
◦ Commonly used in social analysis for phenomena not easily
29. RESEARCH DESIGN MAY BE
QUANTITATIVE OR QUALITATIVE
TYPES OF RESEARCH
Exploratory Research
Descriptive Research
Causal Research
Historical Design
Experimental Research:
30. RESEARCH DESIGN MAY BE
QUANTITATIVE OR QUALITATIVE
TYPES OF RESEARCH
Exploratory Research:
◦ Conducted through literature search, surveys, and case
studies.
◦ Analyzes and evaluates reasons for events, focusing on
cause and effect without determining conclusive results.
Descriptive Research:
◦ Aims to describe issues related to future demands of a
product.
◦ Determines population usage or predicts future demand,
31. RESEARCH DESIGN MAY BE
QUANTITATIVE OR QUALITATIVE
TYPES OF RESEARCH
Causal Research:
◦ Investigates cause-and-effect relationships among variables
affecting market conditions.
◦ Involves laboratory or field experiments to determine causality.
Historical Design:
◦ Utilizes historical approaches to collect and interpret data,
answering questions about the past.
◦ Focuses on determining the accuracy of statements about past
events.
32. RESEARCH DESIGN MAY BE
QUANTITATIVE OR QUALITATIVE
TYPES OF RESEARCH
Experimental Research:
◦ Manipulates variables in controlled conditions with
randomly selected subjects.
◦ Compares results in one topic or area of study, providing
valuable insights.
33. RESEARCH DESIGN MAY BE
QUANTITATIVE OR QUALITATIVE
Sampling Techniques
Considerations:
Population size
Study population
Margin of error
Proportion of study population used
34. RESEARCH DESIGN MAY BE
QUANTITATIVE OR QUALITATIVE
Types of sampling:
Pure random sampling
Systematic random
sampling
Stratified random sampling
Cluster sampling
Combination of techniques
Determine sample size.
Choose sampling
technique.
Perform actual
computation of the
sample.
35. RESEARCH DESIGN MAY BE
QUANTITATIVE OR QUALITATIVE
Respondents of the Study
Definition:
Individuals who respond to a survey or set of
questions. Sample size representing the
population in the study.
36. RESEARCH DESIGN MAY BE
QUANTITATIVE OR QUALITATIVE
Different Sources of Data
Abundant sources of information include:
Bureau of Census and Statistics: Provides data on population, housing,
industry, and trade.
Land Transportation Commission: Offers information on vehicles such as
cars, trucks, motorcycles, and jeeps.
Department of Education: Records enrollments and graduates in schools,
colleges, and universities (public and private).
37. RESEARCH DESIGN MAY BE
QUANTITATIVE OR QUALITATIVE
Supreme Court and Lower Courts of Justice: Maintains records of
judicial cases.
Police Regencies and Offices: Records criminal cases.
Department of Health: Registers births, deaths, and pathological
cases.
Securities and Exchange Commission: Registers trade, industrial,
and commercial establishments, as well as other profit or non-
profit organizations.
Other government departments, offices, and private
38. PRODUCT LIFE CYCLE
Stages of Product
Life Cycle
1. Product Development
stage
2. Introduction stage
3. Growth
4. Maturity
5. Decline
39. PRODUCT LIFE CYCLE
Product Development
Product development is the process of creating or
modifying a product to meet the needs and preferences of
consumers. It involves innovation, creativity, and
adaptation to ensure that the product remains relevant
and competitive in the market.
40. PRODUCT LIFE CYCLE
Stages of Product
Development
1. Idea Screening
2. Concept testing
3. Business Analysis
4. Product
Development
5. Test Marketing
41. PRODUCT LIFE CYCLE
1. Idea Generation
2. Idea Screening
3. Concept testing ideas
4. Business Analysis
5. Product Development
6. Test Marketing
Steps in new Product Planning
Process:
42. PRODUCT LIFE CYCLE
Steps in new Product Planning Process :
1. Idea Generation:
◦ Search for new product or business
opportunities.
◦ Sources: Employees, channel members,
competitors, and customers.
43. Methods of Idea Generation :
a) Brainstorming: Group members share ideas, comments, and
suggestions.
b) Analyzing Existing Products: Study successful products for
inspiration.
c) Reading Trade Publications: Learn from successful entrepreneur
stories.
d) Visiting Suppliers Facilities: Use suppliers' raw materials for
innovation.
e) Surveys: Gather feedback from customers and potential market.
44. 2. Idea Screening:
Evaluate ideas to identify unsuitable, unattractive, or poor ones
for elimination. Categories for rating ideas include: General
characteristics, Marketing characteristics, Production
characteristics
3. Concept Testing:
Ideas passing screening undergo concept testing, where consumer
feedback measures enthusiasm by reacting to a picture, statement,
or oral description of the product.
45. 4. Business Analysis: Review of market factors, revenues, costs,
and trends.
a. Demand Projections: Sales potential, sales growth, rate of
repurchase, distribution intensity.
b. Cost Projections: Per unit cost, raw materials cost, cost of
existing facilities and resources, breakeven point.
c. Competition: Market share of company and competitors,
strengths and weaknesses of competitors, potential
46. c. Competition: Market share of company and competitors, strengths
weaknesses
of competitors, potential competitors.
d. Required Investment: Engineering, patent search, product develop
testing, promotion, production, distribution.
e. Profitability: Time to recover initial cost, per unit profits, distribution
intermediaries, control over price, Return on Investment.
47. 5. Product Development ideas are converted into
tangible form.
This stage involves:
a. Product Construction: Type and quality of
materials, method of production, time and cost
requirements per unit. Plan capacity, sizes, and colors.
b. Packaging: Materials used in promotion or storage,
cost, sizes, and colors.
48. c. Branding: Choice of new or existing name,
exclusivity, trademark protection.
d. Product Positioning: Selecting a market segment.
e. Consumer Attitude and Usage Testing: Launching
the product in a selected market for real-world
feedback.
49. 6. Test Marketing:
Involves selling a fully developed product in a
selected city.
Observes the actual or on-the-spot performance
under the chosen marketing plan.
Based on the results, the firm can decide to proceed
or modify the product.
50. PRODUCT LIFE CYCLE
2. Introduction:
Launching a new product in a market with limited competition. Targeting
early adopters willing to take risks. Using informative promotions and
offering free samples to drive initial sales.
3. Growth:
Product gains popularity; expand distribution and product range. Increased
competition in the profitable market; high profits due to high demand.
Product enhancements and wider distribution with mass advertising.
51. PRODUCT LIFE CYCLE
4. Maturity:
Stable sales; prioritize lower prices and product improvements.
Saturated market; profits decrease from discounting and high
advertising costs.
Products are available at most outlets with varying prices;
promotion is competitive.
5. Decline
Sales decline with new competitors; firms adjust production,
outlets, or promotion. Revive product through repositioning,
packaging changes, or termination.
52. Strategies for Mature
Products:
1. Develop new uses or functions and new purposes for
products.
2. Develop new or add latest product features.
3. Find new classes of consumers or new potential markets for
present products.
4. Increase product use for new product users.
5. Change marketing policies or strategy.
54. FIVE STEPS IN DEVELOPING A PRICING
STRATEGY
1. Objective may be sales-based, profit-based
and status-quo based.
2. Broad Price Policy
3. Price Strategies
4. Implementing Price Strategy
5. Price Adjustments
55. FIVE STEPS IN DEVELOPING A PRICING
STRATEGY
1. Objective may be sales-based, profit-based and status-
quo based.
Sales-Based:
Drive sales growth and market share maximization.
Boost sales via new product designs, lines, and promotions.
Profit-Based:
Maximize profit, ensure satisfactory returns, and optimize
ROI.
56. FIVE STEPS IN DEVELOPING A PRICING
STRATEGY
Status Quo Based:
Prevent government intervention, mitigate competitor impact,
uphold channel relations, deter new competitors, ease
supplier demands, and stabilize prices.
Broad Price Policy:
Establishes procedures, rules, and methods to act in specific
situations. Links prices with the target market, image, and
other marketing elements. Ensures that pricing decisions are
coordinated with other sellers.
57. FIVE STEPS IN DEVELOPING A PRICING
STRATEGY
Types of Broad Price Policy:
Penetration Pricing
Skimming Pricing
58. Types of Broad Price Policy
Types of Broad Price Policy:
Penetration Pricing:
◦ Utilizes low prices to capture or attract the larger mass
market for a product or service.
◦ Price set based on the preferences of the mass majority of
the market.
Skimming Pricing:
◦ Utilizes high prices to attract the market segment more
concerned with product quality, uniqueness, or status than
price.
◦ Seller chooses a high price to determine the true patrons of
59. FIVE STEPS IN DEVELOPING A PRICING
STRATEGY
3. Price Strategies
Price strategies are methods or actions aimed at achieving the
goals and objectives of the company in gaining profit.
Price strategies can be classified into three different
categories:
a. Cost-based Price Strategy:
b. Demand-based Price Strategy:
c. Competition-based Price Strategy:
60. Price strategies can be classified
into three different categories:
Cost-based Price Strategy:
Prices determined by calculating product, service, and overhead
costs, then adding desired profit margin. Seller consolidates all
production expenses and selects optimal profit margin as part of
pricing strategy.
Demand-based Price Strategy:
Prices established through consumer research to align with target
market preferences. Firms analyze product's marketability,
61. Price strategies can be classified
into three different categories:
Competition-based Price Strategy:
Prices are set in relation to competitors' pricing.
Entrepreneurs research prices set by
competitors to determine their own pricing
strategy.
62. FIVE STEPS IN DEVELOPING A PRICING
STRATEGY
4. Implementing Price Strategy
◦ Implementing a price strategy involves the readiness of the firm to sell
the product effectively by offering an attractive pricing strategy listed
below:
◦ Customary Pricing, Variable Pricing, One-price Policy, Flexible
Pricing
◦ Odd Pricing, Price-quality Association, Prestige Pricing, Leader
Pricing
◦ Multiple-unit Pricing, Price Lining, Price Bundling, Unbundled
63. FIVE STEPS IN DEVELOPING A PRICING
STRATEGY
Here are explanations of the sample transactions:
FOB Factory:
◦ The buyer pays for all freight charges regardless of the distance.
◦ The buyer covers all expenses incurred during the transfer of the
product.
Uniform Delivered Pricing:
◦ Buyers pay the same delivered price for the same quantity of
goods.
◦ The entrepreneur considers the quantity of goods in setting the
64. FIVE STEPS IN DEVELOPING A PRICING
STRATEGY
Zone Pricing:
◦ Buyers within a geographic zone pay a uniform delivered price.
◦ The entrepreneur charges the same amount of fees to one
particular location within the zone.
Base-Point Pricing:
◦ The cost of transporting goods is computed from the base point
nearest to the buyer.
◦ The most accessible and nearest buyer determines the base
point for distributing the product.
65. FIVE STEPS IN DEVELOPING A PRICING
STRATEGY
Terms of Payments:
Price agreements, including discounts, timing of
payments, and credit agreements.
Discounts: Reductions in the selling price given to
customers for various reasons such as paying in cash,
performing certain functions, buying in large quantities,
or purchasing during off-seasons.
66. FIVE STEPS IN DEVELOPING A PRICING
STRATEGY
5. Price Adjustments
Price Adjustments Changes in cost, competitive
conditions and consumer demand require changes in
price.
Prices can be adjusted in the list prices, escalator
clauses, surcharges, mark-ups, markdowns, and
rebates
67. Prices can be adjusted via:
List Prices: Published prices in catalogs, tags, and orders, facilitating clear negotiations
for salesmen.
Escalator Clauses: Contract provisions permitting pre-delivery price increases,
contingent upon seller communication and buyer consent.
Surcharges: Supplementary fees added to list prices, strategically employed to bolster
loyalty and profitability.
Mark-ups: Price adjustments in response to heightened demand or increased costs,
demanding careful management to preserve loyalty.
Markdowns: Price reductions aimed at matching competitors, clearing excess inventory,
or stimulating customer footfall, influencing profitability.
69. Factors to Consider:
Customer Perception of Value: Understanding how customers perceive the
value of the business's offerings.
• Costs Involved: Considering overhead, storage, financing, production, and
distribution costs.
• Profit Objectives: aligning pricing with profit objectives, whether maximizing
profits, achieving specific margins, or covering costs.
Competitor Pricing: Determines prices based on prices charged by
competitors.
Market Pricing: Sets prices by adding per-unit merchandise costs, operating
70. Advantages and Disadvantages:
◦ Each method has corresponding pros and cons.
◦ Effective method depends on the specific situation and market
dynamics.
Flexibility in Pricing Strategies:
◦ Companies can use single or multiple strategies, or combine multiple
policies.
◦ Adaptation of strategies to meet sales objectives and organizational
needs.
72. Place
◦ refers to making products available in the right
quantities and locations where customers want them,
◦ involving the process of moving goods and services
from the company to the customer.
Distribution Strategy:
◦ The chosen distribution channel must provide a
strategic advantage to the company.
73. Common Distribution Channels:
Direct Sales: Goods directly to end users.
Original Equipment Manufacturer OEM Sales: Manufacturer
sells products.
Manufacturer's Rep: Wholesaler sells for manufacturers on
commission.
Wholesalers: Sell to retailers or agents.
Brokers: Buy from wholesalers, sell to retailers or users.
Retailers: Sell to consumers.
Direct Mail: Targeted marketing sent to consumers.
74. Channel of Distribution:
◦ Distribution involves individuals or organizations facilitating
goods and services flow from manufacturer to consumer or
business user.
Channel Members:
◦ Can include manufacturers, service providers, wholesalers,
retailers, marketing specialists, or consumers.
Middlemen:
◦ Act as intermediaries between the producer and the
consumer, including wholesalers, retailers, and marketing
75. PLACE/DISTRIBUTION
Physical Distribution:
◦ Physical Distribution encompasses activities ensuring efficient
delivery of goods
from raw materials to finished products, prioritizing timely and
proper conditions.
Types of Physical Distribution
•Transportation
•Inventory Management
•Warehousing
•Retailing
•Scrambled Merchandising
•Wholesaling
77. PROMOTION:
Definition: Various communication forms to inform,
persuade, and remind about goods, services, or
ideas.
Promotional Mix:
◦ Combination of strategies for promotion
objectives.
78. Types of PROMOTION
Advertising: Paid non-personal communication through media to
promote goods, services, or ideas.
Publicity: Non-personal communication through media without an
identified sponsor.
Personal Selling: Oral communication by paid representatives to
make sales.
Sales Promotion: Paid marketing activities stimulating purchases and
dealer effectiveness.
79. PROMOTION STRATEGY:
Advertising Aspects: Budget, positioning message, media schedule.
Public Relations: Publicity strategy, media used, special event schedule
Sales Promotion: Incentives like special sales, coupons, contests, tra
ins.
Personal Sales: Sales strategy including pricing, returns, sa
presentations,
lead generation, customer service, salesman compensation,
responsibilities.
80. Selection Factors:
Product Life Cycle (PLC):
◦ Different stages of the PLC require tailored
strategies.
Company Characteristics:
◦ Product lines influence available promotional tools.
Relations with Middlemen:
◦ Dealer impact on company effectiveness and
efficiency.
82. Market Positioning:
Innovator/Leader vs. Follower:
◦ Innovator/Leader: Initiates selling new products to the
market with unique strategies.
◦ Follower: Copies existing products without introducing
new ideas.
83. Domestic vs. International/Global:
◦ Domestic: Produces for local consumption, focusing on the local
market.
◦ International/Global: Expands product line beyond national
boundaries, overcoming cultural and social barriers.
Quality vs. Price:
◦ Quality: Prioritizes high-quality materials and customer satisfaction.
◦ Price: Focuses on affordability and cost-effectiveness for the
market.
