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Marketing mix the 7 p's of marketing

Marketing 25- Mr. Quiwa

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Marketing mix the 7 p's of marketing

  1. 1. Marketing Mix: The 7P’s of Marketing
  2. 2. • Marketing Mix• Buyer Behavior• Assembling the Marketing Mix• Diagnostic Marketing Mix• Marketing Plan• 4S’s in Marketing Plan
  3. 3. Marketing Mix •The Marketing Mix is one of two interrelated components of strategy •The Marketing Mix, more popularly referred to as the 7Ps of Marketing is a set of controllable and interrelated variables composed of product, place, price and promotions that a company assembles to satisfy a target group better than it’s competitor. •Marketing Mix strategy is choosing and implementing the best possible course of action to attain the organization’s long- term objectives and gain competitive edge.
  4. 4. Product Place Promotions Price PeoplePhysical Appearance Process
  5. 5. Product To satisfy the needs and wants of the target market.
  6. 6. Place To make the product conveniently available to the target market consistent with their purchasing pattern.
  7. 7. Promotions To build and improve consumer demand. Promotions has four components called the Promotions Mix as follows: •Advertising – to effectively inform and persuade the target market •Public Relations – to offer a positive image of the company and the brand •Selling – to get the customers buy •Sales Promotions – to convince customers to buy immediately
  8. 8. Price To make the product affordable to the target market and reflect the value of benefits provided.
  9. 9. People They are the target consumers of the company. They are the ones who are the consumers
  10. 10. Physical Appearance Physical appearance is the first distinction of a product. A product could be easily recognized by it’s appearance.
  11. 11. Process The process of the product is essential in marketing. This determines the capability of the product to supply the demand of the consumers.
  12. 12. •Product, place and people areconsidered as the strategic Ps ofmarketing mix since they cannot bechanged overnight.•Promotions, price, process andphysical appearance are consideredas the tactical Ps of marketing mixbecause these can be changedmore easily.
  13. 13. •Marketers of consumer packaged goods such as food andpersonal care products sold in supermarkets would often add“Merchandising” as another component of the marketing mix.•Merchandising aims to extend advertising message at thepoint of purchase (POP) by generating superior presencewithin the store.•Many companies uses store signs, posters, price tags, shelftakers and island displays.•Companies spend a significant 1% of their sales onmerchandizing.
  14. 14. Buyer Behavior •An important component of the consumer purchase decision-making process. The Factors Influencing Buyer Behavior in Consumer Markets •Cultural Factors •Social Factors •Personal Factors •Psychological Factors
  15. 15. Cultural Factors •Culture and sub-culture – Many older Chinese like to eat Shark’s fin soup as well as Bird’s nest soup, which environmentalist despise. •Social class – Buying a real estate property is dependent, among others, on the how consumer perceive the quality of their desired neighborhood and the status symbol that comes with a high-end development.
  16. 16. Social Factors •Reference Group – High-end brands like Nike shoes or acquiring a Globe celphone to be a member of their Gen Txt Club are examples of how peers can affect a purchase •Family – demand for products such as PLDT long-distance calls is influenced by the Pinoy’s strong family attachment •Role and statutes – Mont Blanc pens are positioned as the pen for presidents of companies, as well as countries. Johnny Walker Label is another example of whiskey positioned for successful people.
  17. 17. Personal Factors•Age and life cycle – Retirees are the prime market for manyluxury cruises, as it is consistent with the slow, relaxing pacethey desire.•Occupation – Pamper Uni are bought by working mothers whocannot afford to rest in the morning. The International Schooltargets children of expatriates.•Economic Circumstances – Network marketing offers equalopportunity to those who want to start and grow their ownbusiness without the large capital involved in putting uptraditional businesses.•Lifestyle – Kraft imported cheese and Lazy Boy chairs areexamples of lifestyle products.•Personality and Self-concept – Premium brands like Rolex,cars and even clothes are driven by how the buyer looks athimself of herself
  18. 18. Psychological Factors •Motivation – Many government employees now enroll in graduate school to gain the competitive advantage versus their peers in aspiring for a promotion. •Learning – AMC cookware utilizes demonstration to show the product’s unique ability to fry chicken without oil, boil egg without water and cook food simultaneously without taste transfer using low fire. •Beliefs and Attitudes – Sony is believed to be a brand with a higher quality. Some consumers think that installing chimes can bring in good luck to homes and offices. A diamond ring is a must in every engagement and wedding.
  19. 19. Assembling the Marketing Mix Before a marketing mix is formed, there must be an analysis and definition of target customers. 1. In the Macro level, market segmentation answers the question “What are the groupings of similar customers?” 2. In Micro level, • Decision Making Unit (DMU) points to “Who purchases the product?” • Decision Making Process (DMP) answers the question “How, where, and when is the purchase made?” • Consumer motivation and preferences guides the marketer to answer, “What does the consumers want and why?”
  20. 20. •In satisfying customers, marketers must not assume who thedecision maker is or the mistake may be costly for the firm.•Marketers must consider the more complex DMU’s that areusually involved in the decision making process (DMP) formost products and services.•Marketers must therefore consider the initiator, influencer,decider, buyer and the user for every purchase – not just theuser.•The general characteristics of the firm’s marketing mix isshaped by the target market’s preparedness to adopt aproduct.•Marketers usually make use of several market researches tounderstand their customers better. One of the most popularand widely used market research report is called Usage,Attitude and Image (UAI) survey.
  21. 21. Product Value •Products may either be superior, at par with (the same), or basic to those competition. •A superior product satisfies more needs and wants of customers while a basic product satisfies lesser needs. •While our initial tendency is to think that consumers enjoy superior products all the time, we must realize that products with less features may still be desired by the lower income consumer segment.
  22. 22. •In the Philippines for instance, some 92% of ournationwide population belongs to the lowerincome D and E class and these “consumers”may be looking for very basic products.•The new definition of “Quality” is that whichconforms to consumer’s specification, measuredthrough indicators of customers satisfaction,rather than indicators of self-gratification.•It is consumers who decides on quality not thecompany.•After product quality is defined, it’s inseparabletwin, price, is defined to ensure an appropriateproduct value.
  23. 23. Marketing Program •After product value is formulated and accepted to the target customers, marketing programs are then assembled by identifying which of the marketing mix component should logically be the main weapon and which should be the support strategy. Product Program Value (Marketing) (Competitiveness)
  24. 24. 1.Distribution Driven • Some companies are distribution-driven, meaning, their product must be available when and where customers expect them to be. Their location are the single most important factor in their business.
  25. 25. 2. Selling – Driven • Some companies are selling driven especially when products are only available through the salesman.
  26. 26. 3. Sales Promo – Driven •Other companies that are sales promo driven are fast food parlors like Jolibee and Mc Donalds which have at least eight major promo campaign yearly to bring back consumers to the store as often as possible.
  27. 27. 4. Price – Driven •Makro is a price driven brand. Without any fancy display, Makro boasts of rock-bottom prices everyday, which attract people to visit the hypermarket.
  28. 28. 5. Advertising – Driven •Coke is advertising-driven. It intends to be top-of-mind in the soft drinks industry as it constantly reminds consumers of the different usage occasions for Coke. Its ad-driven strategy is supported with a heavy distribution effort, sales promo support and parity pricing with competition.
  29. 29. Diagnostic Marketing Mix •Diagnostic marketing mix entails the matching of correctly defined marketing problems with the proper marketing solution. Marketing Problem Marketing Solution Low awareness level Advertising Low Availability Placement Low Trial Rate Pricing and/or Promotions Low Repeat Purchase Product and/or Service Quality
  30. 30. •The marketing mix of a company seldom stays the same.•Marketers must therefore have a systematic way of reviewing whatworked and why, what didn’t work and why.•Answering these queries are a prerequisite before planning whatshould be added or what should be dropped in order to attain,enhance or maintain competitive edge.
  31. 31. • Competitive advantage is secured by providing better or best value in the perception of the customer, relative to all your competitors.• A company’s capabilities can become a true competitive advantage if the following 5 criteria are met: 1. It is valuable in the marketplace 2. It is superior in the marketplace 3. It is difficult to match or imitate 4. It is difficult to substitute 5. It is difficult to trade and gain
  32. 32. Marketing Plan •The marketing mix is actually the heart of an important company document called the marketing plan, which outlines how the company intends to grow in the marketplace and win against competition. •The marketing plan is usually formulated annually, but results are reviewed monthly.
  33. 33. Format of a Marketing PlanExecutive SummaryBusiness Review (performance of the previous years)Environmental Analysis Key Factors for Success Strengths and Weaknesses Analysis Threats and Opportunities AnalysisMarket SegmentationMarketing Objectives and GoalsMarketing Strategy Product Positioning Customer Satisfaction Strategy Preferred Brand Strategy Contingency PlanMarketing BudgetMarketing Implementation GuideAppendix
  34. 34. 4S’s in Marketing Plan • The marketing mix can change over time. However, all marketing programs must be able to meet the 4 basic criteria to be considered a diligently through-out campaign 1. Sufficiency – the marketing mix must be able to adequately meet the defined marketing objectives. This means ambitious growth objectives would naturally need the corresponding heavier investment in marketing support programs.
  35. 35. 2. Selective – the marketer must be able to considerall potential alternatives of each marketing mix beforeshort-listing all possible combinations of the marketingmix that can meet their marketing objectives. The onethat can provide the best profitability is the one logicallyto be chosen. This is not easy as there are literallymillions of combinations. But the least the marketingman can do is to short list the more obvious one andapply due diligence in planning each possible option.
  36. 36. 3. Synchronize – when the marketing mix is selected,the different elements must combine harmoniously forthe brand become successful. For example, a marketercannot choose to invest in heavy advertising of a lowquality product sold on a high price. In such a case, theelements of the marketing mix is not logicallysynchronized.4. Sustainability – the marketing mix that is finallychosen must be able to last in the long term vis-à-viscompetition. For instance, a lower price strategy not onlyrisks a price war but is not sustainable unless the firm isthe cost leader in the industry.