MARKETING MANAGEMENT

1. III. Creating and Managing the
Marketing Mix

2. MARKETING MIX
- It is a tool that is made up of four unique but interconnected
and interdependent variables.
- It is the combination of the 4P’s: Product, Price, Promotion,
and Place.

3. MARKETING MIX: PRODUCT
- It is one of the marketing mix elements.
- It is an item that satisfies a need or a desire.
- It can be a physical item, a service or a virtual offering.
- It is produced at a cost and is subsequently made available to
the right audience at a price.
What is a Product?

4. ⮚ Every product should have certain characteristics that
separate it from its competitors.
⮚ These characteristics should be foremost inputs to the
product’s marketing mix.
⮚ When a product is envisioned, it is an answer to an
identified market need. This need is translated into a
product with particular characteristics.
Features and Value creation

5. ⮚ It is a factor that is shown to be the basis of why one
product is better than its competitors.
⮚ The company needs not only to identify its USP, but also to
clearly communicate it to the potential audience so that it is
understood why the product is superior to other similar
ones.
Unique Selling Proposition

6. ⮚ Tangible products: These are items with an actual physical presence
such as a car, an electronic device, and an item of clothing or a
consumer good.
⮚ Intangible products: These are items that has no physical presence but
can be felt indirectly, such as an insurance policy and online items such
as software, applications or even music and video files.
⮚ Services: These are intangible products that include a process which
creates benefits for customers. They depend highly on who is
performing them and remain difficult to reproduce exactly.
PRODUCT CLASSIFICATION

7. ⮚ Consumer Products: These are goods that are bought for personal,
non-business use. They can be: Convenience Goods, Shopping Goods,
Specialty Goods, and Unsought Goods.
⮚ Business Products: These are goods that are bought for business
purposes, such as for resale, for further production of the goods, or for
office operations. They include: Raw Materials, Fabricating Materials
and Parts, Installations, Accessory Equipment, and Operating Supplies.
PRODUCT CATEGORIES

8. CONSUMER PRODUCT CLASSIFICATIONS
1. Convenience Goods: These are goods that are usually bought with a minimum
of effort and time. They are very much familiar to the consumers as to brands
available, price ranges, and where they can be bought.
a. Staple Goods– goods purchased on a regular basis.
Ex. toothpaste, shampoo, coffee, milk, juice, biscuits
b. Impulse Goods – purchased without planning or search effort.
Ex. batteries, candies, blades, razor
c. Emergency Goods – purchased when a need is urgent.
Ex. candle, emergency lamp, medical plaster, umbrellas

9. CONSUMER GOODS CLASSIFICATIONS
2. Shopping Goods: These are goods which, before being bought, are being
compared in terms of suitability, style, quality and price.
Ex. Clothing
Appliances
Automobile
3. Specialty Goods: These are goods that consumers have a strong brand
preference and are willing to expend substantial time and effort in locating the
desired brand.
Ex. specific brands and types of fancy goods, cars, audio
components, and men suits

10. CONSUMER GOODS CLASSIFICATIONS
4. Unsought goods: These are new products that the consumer is not
yet aware of or he is aware of but does not want right now.
Ex. Memorial Plan,
Accident and Life Insurance
Memorial Lots
Fire Extinguisher
Condominium
Town Houses

11. BUSINESS PRODUCT CLASSIFICATIONS
1. Raw materials: These are business goods that become part of
another tangible product prior to being processed in any way.
Ex. Farm Products : fruits and vegetables, rice, root crops
livestock
Natural Products : fish/shrimp/crabs, limber, crude
petroleum, iron ore, copper, gold

12. BUSINESS PRODUCT CLASSIFICATIONS
2. Fabricating materials and parts: These are business goods that
become part of the finished product after having been processed.
Ex. Fabricating Materials: Yarn woven into cloth
Flour made into bread
Fabricating Parts : Zipper on clothing
Semiconductor chips on computer
Tires in car or motor
Brake or clutch linings

13. BUSINESS PRODUCT CLASSIFICATIONS
3. Installations: These are manufactured products that are an
organization’s major, expensive and long-lived equipment.
⮚ They consist of buildings (e.g., manufacturing plants and offices)
and fix equipment (e.g., drill presses, computers, elevators, and
generators).

14. BUSINESS PRODUCT CLASSIFICATIONS
4. Accessory equipment: These are tangible products that have
substantial value and are used in an organization’s operations.
⮚ Their lifespan is shorter than installation but longer than
operating supplies.
Ex.
Tables & chairs
Slide/overhead projectors
Fax Machines
computer and printer

15. BUSINESS PRODUCT CLASSIFICATIONS
5. Operating supplies: These are characterized by low peso value per
unit and a short life and that aid in an organization’s operations without
becoming part of the finished product.
Ex. Ink for printer
Bond paper
Stationary
Pen/pencils
Fax machine paper
Paper clip

16. INNOVATION
• It is creating something different with value.
• It could be introducing either something new or different, even if it is
old enough.
• It could be in terms of product, marketing, process, technology,
organization, or strategy innovation.

17. IMPORTANCE OF PRODUCT INNOVATION
1. Requirement for growth
* Essential in sustaining company's revenues and profit
2. Increased consumer selectivity
* Reduced buying power
* Abundance of similar products
3. High failure rates
* If not being different from existing products
* If it does not deliver on its promise
* If it is perceived as offering poor value in
relation to price

18. CATEGORIES OF NEW PRODUCT
1. Products that are really innovative
- Smart Dressing
- Chemo hair saver
- Deep sleep pillow
2. Replacements that are significantly different from existing products
- Magic Mirror
- Red alert contact lens
- Disposable contact lens
- Electric car
3. Imitative products that are new to a particular company but not new to
the market
- Milo Cereals

19. NEW PRODUCT STRATEGY
• It is a statement identifying the role a new product is
expected to play in achieving corporate and marketing
goals.
⮚Roles: Protect Market share
Maintain company’s reputation

20. STAGES IN NEW PRODUCT DEVELOPMENT
1. Generating new-product ideas
- Stimulating new ideas in organization
- Customers and suppliers are the best source of product ideas.
2. Screening ideas
- New-product ideas are evaluated.
3. Business analysis
- Expanding surviving idea into concrete proposal (Business
Proposal)

21. STAGES IN NEW PRODUCT DEVELOPMENT
4. Prototype development
- Prototype is a trial model of the product idea.
5. Market tests
- Product testing involving actual customer
- Product design and production are adjusted based on the test
findings.
6. Commercialization
- full-scale production and marketing
programs are planned then implemented.

22. PRODUCER'S CRITERIA FOR NEW PRODUCTS
1. Market demand
2. Financial aspects
3. Environmental standards
4. Company’s present marketing structure

23. NEW PRODUCT ADOPTION
• Adoption Process- is a set of successive decisions an
individual makes before accepting an innovation.
⮚ It involves Awareness, Interest, Evaluation, Trial,
Adoption, and Confirmation.

24. PRODUCT MIX
• It is the full list of all products offered for sale by a
company.
▪ Dimensions:
⮚ Breadth- is measured by the number of product
lines carried.
⮚ Depth- is measured by the variety of sizes, colors,
and models offered within each product line.

25. PRODUCT LINE
• It is a broad group of products intended for essentially
similar uses and having similar physical characteristics.

26. PRODUCT LINE: COCA-COLA
Soft Drinks
▪ Coke
▪ Coke Diet
▪ Coke light
▪ Coke Zero
▪ Sprite
▪ Royal Thru
▪ Royal Thru
Light
▪ Pop Cola
▪ Sparkle
▪ Sarsi Cola
▪ Jaz Cola
▪ Lift
▪ Fanta
Flavored
Juice
▪ Nestea
▪ Eight
O’Clock
▪ Funchum
▪ Cheers-
Fruit
▪ Ponkana
▪ Minute
Made
▪ Hi-C
▪ Hi-C Tea
Energy Drink
▪ Powerade
▪ Samurai
▪ Earth &
Sky
Drinking water
▪ Wilkins
▪ Viva

27. PRODUCT MIX STRATEGIES
1. Positioning the Product
-developing the image that a product wants to project in
relation to competitive products and to the firm’s other
products.
⮚ Positioning in relation to a competitor
⮚ Positioning in relation to a product class or attribute
⮚ Positioning by price and quality
⮚ Positioning in relation to a target market

28. Positioning the Product
Positioning in relation to a competitor
▪ Head & Shoulder – The number one Anti-Dandruff Shampoo
▪ McDonald’s – The world’s number 1 in Fast-Food Chains
Positioning in relation to a product class or attribute
▪ 7-up - Non-cola
▪ Made in USA
▪ Environment friendly
Positioning by price and quality
▪ Smart - “Simply Amazing” in terms of price and performance
▪ Palawan Pawnshop
▪ Surf
Positioning in relation to a target market
SM - “We got it all for you”

29. PRODUCT MIX STRATEGIES
2. Product-mix expansion
⮚ Line extension - adding a similar item to an existing
product line with the same brand name
⮚ Mix extension - adding a new product line to a
company’s present assortment
❖ Related product, same brand
❖ Unrelated product, same brand
❖ Related product, different brand
❖ Unrelated product, different brand

30. Product-Mix Expansion
A. Line Extension
⮚ Nescafe creamy white, cappuccino, creamylatte
B. Mix Extension
a. Related product, Same Brand
▪ Dove, Johnson and Johnson
b. Unrelated product, same brand
▪ Adidas Shoes – Adidas Perfume
▪ Yamaha Musical Instrument – Yamaha Motorcycle
c. Related product, different brand
▪ Coke – Wilkins, Viva
d. Unrelated product, different brand
▪ P&G - JOY & Pringles
▪ SMC – Beer & Meat (Monterey)

31. PRODUCT MIX STRATEGIES
3.Trading up and trading down
• Trading up- adding a higher priced product to a line to
attract a broader market.
⮚ Ex. P&G – Olay
• Trading down- adding a lower priced product to a
company’s product line.
⮚ Ex. Coca-Cola - Pop-Cola & Sarsi Cola

32. PRODUCT MIX STRATEGIES
4. Alteration of Existing Products
⮚A strategy of improving an existing product
⮚Redesigning the product’s packaging
⮚Commonly done among consumer products

33. PRODUCT MIX STRATEGIES
5. Product-mix Contraction
⮚ carried out by either eliminating an entire line or by
simplifying the assortment within a line.
⮚ Examples:
⮚ General Electric Corporation eliminates the lines
of computers
⮚ Xerox Corporation eliminates the lines of
computers

34. PRODUCT LIFE CYCLE
• It is the process a product goes through from when it is
first introduced into the market until it declines or is
removed from the market.
• Four Stages:
⮚ Introduction
⮚ Growth
⮚ Maturity
⮚ Decline

35. PRODUCT LIFE CYCLE

36. PRODUCT LIFE CYCLE
1. Introduction
⮚ In this stage, the product is being released into the market.
⮚ During the introduction stage, marketing and promotion are at a high
- and the company often invests the most in promoting the product
and getting it into the hands of consumers.
⮚ Costs are generally very high and there is typically little competition.

37. PRODUCT LIFE CYCLE
2. Growth
⮚ By the growth stage, consumers are already increasingly buying the
product.
⮚ The product concept is proven and is becoming more popular - and
sales are increasing.
⮚ Marketing in this stage is aimed at increasing the product's market
share.

38. PRODUCT LIFE CYCLE
3. Maturity
⮚ When a product reaches maturity, its sales tend to slow or even stop -
signaling a largely saturated market.
⮚ At this point, sales can even start to drop.
⮚ Marketing at this point is targeted at fending off competition, and companies
will often develop new or altered products to reach different market
segments.
⮚ In this stage, less successful competitors are pushed out of competition -
often called the "shake-out point."

39. PRODUCT LIFE CYCLE
4. Decline
⮚ In the decline stage, product sales drop significantly and consumer behavior
changes as there is less demand for the product.
⮚ The company's product loses more and more market share, and competition
tends to cause sales to deteriorate.
⮚ Marketing in this stage is often minimal or targeted at already loyal
customers, and prices are reduced.
⮚ Eventually, the product will be retired out of the market unless it is able to
redesign itself to remain relevant or in-demand.

40. Uses of PLC Analysis
⮚ Conducting PLC analysis can help companies determine if their products are
servicing the market they target efficiently, and when they might need to shift
focus.
⮚ By examining their product in relation to the market on the whole, their
competitors, sales and expenses, companies can better decide how to pivot
and develop their product for longevity in the marketplace.

41. PLC Strategies
⮚ Companies often run into trouble when they don't understand the
introduction stage of their product's life cycle - especially when
customers do not respond well to the initial product (either because of
pricing or the inherent value and usefulness of the product).
⮚ It is important to examine product advertising and packaging in
addition to pricing.
⮚ Conducting a PLC analysis can help companies learn when they
need to reinvent or pivot their product in a new direction.

42. BRANDING
Brand
⮚ is a name and/ or mark intended to identify the goods and services
of one seller or group of sellers and differentiate the product from
competing products.
Brand Name
⮚ consists of words, letters, and/ or numbers that can be vocalized.

43. BRANDING
Brand Mark
⮚ is the part of the brand that appears in the form of a symbol, design,
or distinctive color or lettering.
Trademark
⮚ is a brand that has been adopted by the seller and given legal
protection.

44. Characteristics of a Good Brand Name
1. Should suggest something about the product, particularly its benefits and
use. (ex. SUNSILK, SKINWHITE, EVEREADY, SAFEGUARD)
2. Be easy to pronounce, spell and remember: simple, short, one-syllable. (ex.
SONY,TIDE, IBM)
3. Be distinctive. (ex. GUESS, TOYOTA)
▪ 4. Be adaptable to new products that may be added to the product line. (ex.
JOLLIBEE, MCDONALD)
5. Be capable of registration and legal protection.

45. Generic Name
A brand name can become generic in several ways:
1. The patent expires.
Ex. Kerosene, Aspirin
2. There is no single generic name available.
Ex. Nails, Cellophane, Nylon, Salt
3. A firm is so effective in promoting a brand name.
Examples:
Colgate- for toothpaste
Xerox- for photocopy
Pampers- for diapers
Kodak- for picture

46. Branding Strategies
1. Family Branding – a strategy of using the company name for branding
purposes.
❖ Enervon –Enervon C tablets, Enervon C Drops, Enervon C Liquid
❖ Johnson – Johnson’s Baby powder, Johnson’s Baby Shampoo, Johnson’s
Baby oil, Johnson’s Baby cologne
❖ Coca Cola – Coke, Coke Diet, Coke Zero

47. Branding Strategies
▪ Multiple Brand Strategy – a firm has more than one brand of essentially
the same product category, aimed either at the same target market or at
distinct target markets.
❖ Unilever Shampoo – Sunsilk, Clear, Vaseline, Dove, Gard
❖ Coca Cola – Coca Cola, Royal, Sprite, Coke
❖ Procter & Gamble – Tide, Ariel, Bonux

48. Brand Equity
• It is the value a brand adds to a product.
• It is a measure of the brand’s ability to capture
consumer preference and loyalty.

49. Brand Equity
Benefits:
⮚ The brand itself can become a differential advantage, influencing
consumers to buy a particular product.
⮚ It creates a barrier for companies that want to enter the market with a
similar product.
⮚ It can help a product survive changes in the operating environment,
such as business crisis.

50. Trademark Licensing
• It is a business arrangement in which the owner of a trademark grants,
permission to other firm to use the owner’s brand name, logo type, and/ or
character on the licensee’s products in return for a royalty on sales of those
products.
Examples:
Disney
Calvin Klein
Tommy Hilfiger
Gucci
Winnie the Pooh
Sesame Street
Scooby Doo

51. PACKAGING
▪ Packaging – consists of all the activities of designing and
producing the container or wrapper for a product.
▪ Package – is the actual container or wrapper of the product.

52. Packaging Purposes
1. Protect the product on its way to the consumer.
2. Provide protection after the product is purchased.
3. Be part of a company’s trade marketing program.
4. Be part of a company’s consumer marketing program.

53. Packaging Strategies
1. Family Packaging – a strategy of using either highly similar
packages for all products / packages with a common and clearly
noticeable feature.
▪ UNILAB Pharmaceutical – Tablets
1. Multiple Packaging – is the practice of placing several units of the
same product in one container.
Ex. Candy Bars – Toblerone & Kitkat
Beauty Soap “ 3 in 1”

54. LABELING
• It is the part of the product that carries information about the product and the
seller.
Types of Label:
❖ Brand Label- is simply the brand alone applied to the product or package.
❖ Descriptive Label- gives objective information about the product’s use,
construction, care, performance, and / or other pertinent features.
❖ Grade Label- identifies the product’s judged quality with a letter, number, or
word.

55. OTHER PRODUCT FEATURES
1. Product Design – refers to the arrangement of elements that collectively
form a good or service.
▪ Product Color – determines product acceptance.
2. Product Quality- refers to the set of features and characteristics of a
good or service that determines its ability to satisfy needs.
▪ Performance
▪ Durability
▪ Conformance
▪ Features

56. OTHER PRODUCT FEATURES
3. Warranty – is an assurance of compensation.
▪ Express Warranty – those stated in written or spoken words.
▪ Implied Warranty – intended although not actually stated by the seller.
▪ Product Liability – a legal action asserting that an illness, accident, or
death resulted from the named product because it was harmful, faulty,
or inadequately labeled.
4. Post sale services – maintenance and repairs as well as services that are
provided to customers in order to fulfill the terms of a firm’s warranty
and/ or to augment the firm’s revenues.

57. Marketing Debate
III. Creating and Managing the Marketing Mix

58. Marketing Debate: Take a Position!
✔ With products, is it form or function?
1. Product functionality is the key to brand
success.
or
2. Product design is the key to brand
success.

59. Marketing Discussion
✔ Consider the different means of differentiating products
and services.
✔ Which ones have the most impact on your choices?
✔ Why?