Developing A Business Plan (DP)

Recognize the importance of

marketing mix in the development of
marketing strategy
 Learning Competencies
• Product
• Place
• Price
• Promotion
• People
• Packaging
• Positioning
• Develop a brand name
The Nine Dots
The Marketing Mix: The 7Ps of Marketing
• The marketing mix is a widely accepted strategic marketing tool
that combines the original 4Ps (product, place, price,
promotion) with additional 3Ps (people, packaging and process)
in formulating marketing tactics for a product or service. These
7Ps are employed until the entrepreneur finds the right
combination that will most effectively serve the customer’s
needs and wants and at the same time archive the profitability
objective.
• The 7Ps are controllable by the entrepreneur and therefore
must be well thought of to be successful. Prior to the 7Ps and
the 4Ps were used in marketing products or physical goods only.
 A CHALLENGE TO A BUDDING ENTREPRENEUR IS TO
ASK THE FOLLOWING QUESTIONS AT THE ONSET:

• PRODUCT – What product/ service is the most appropriate for

the opportunity and why will customers buy or avail them?
• PLACE – What location is the best suited for the business
where there are more potential customers? Can they
conveniently transact on-site or online? How is the process of
distribution of products or performance of services?
• PRICE – What is the most appropriate price and what pricing
strategies will be used for the target customers?
• PROMOTION – What is the most effective advertisement or
combination of advertisements and which advertising tools
should be used to drive awareness and increase sales?
 A CHALLENGE TO A BUDDING ENTREPRENEUR IS TO
ASK THE FOLLOWING QUESTIONS AT THE ONSET:

• PEOPLE – What type of people need to be hired? What are

the basic skills needed for the job? What leadership style
will be applied by entrepreneur?
• PACKAGING – What is the best packaging for the product
that is attractive enough to customers and cost-efficient at
the same time? What physical evidence does the
entrepreneur need to set up so as to sell the service?
• PROCESSING – What is the most compelling feature of the
product or the business that will make a difference in the
lives of the customers? What sets the product or service
from the rest?
 LET THE MARKET KNOW YOU BETTER
• 1. Product - is a tangible good or intangible service
that the enterprise offers to its customers in order to
satisfy their needs and to produce their expected
results.
THE 3 LEVEL OF CONCEPT OF PRODUCTS OR SERVICES:
• Level 1 – Core benefits of the product or service
• Level 2 – Physical Characteristics of the product or
serve
• Level 3 – Augmented benefits of a product or service
 LET THE MARKET KNOW YOU BETTER
2. Place - “Location, Location, Location” this is the often-
recited mantra of salespeople who want to have the best
location to have the best access to the customer.
• Initial Location Screening
• The number of customer residing or working.
• The Density or number of customer unit per area.
• The access routers to alternative locations.
• The buying habits of customers.
• Locational features like parking spaces, foot access, etc.
 LET THE MARKET KNOW YOU BETTER
• 3. Price - Pricing depends on the business objectives set by the
enterprise.

The enterprise should set prices of its products or services based on its
business objectives such as ff:
• Profit maximization
• Revenue maximization
• Market share maximization
• Attainment of the desired prestige or quality leadership
• Penetration, survival, or liquidation
• Scarcity pricing or market skimming
• Cost recovery
• Subsidy pricing
• Marginal pricing
 Common Pricing Strategies:
• Bundling – e.g. 3-in-1 coffee for P8.00 / Manicure & Pedicure
for P110.00
• Penetration pricing – e.g. A mobile app-based transportation
service offering reduced booking fee P15.00 as its introductory
price)
• Skimming – e.g. A real estate company offering top-tier
projects is now offering low-cost housing of same quality to
serve the middle market segment
• Competitive pricing – e.g. Milk tea prices are competitively
priced
• Product line pricing – e.g. LED TV is more expensive than the
LCD TV even if under the same brand
 Common Pricing Strategies:
• Psychological pricing – e.g. price of haircut is P199.00 because
consumers tend to think that old prices are considerably lower than
what they are; in this example, they tend to round off the price to
P100.00 instead of P200.00
• Premium pricing – e.g. Prices of signature clothes, bags & perfume
• Optional pricing – e.g. Meals on top of the air fare
• Cost-based pricing – e.g. the entrepreneur will compute the cost of
coconut juice by adding the cost of the coconut juice (P10) and the
plastic container (P4). He or she can set the price at P20.00 to earn
P6.00 per coconut juice
• Cost plus pricing – e.g. the entrepreneur wants to set a 50% markup
on the coconut juice cost which is P14 x 50% = P7.00; the new price
is P14 + P7 = P21.00
The profit of an entrepreneur can be
determined only if there is a proper
computation of cost associated with the product
or service. There are two classifications of costs:

• Variable costs or controllable costs

• Fixed costs or uncontrollable costs
 PRICING GUIDELINES:
a. Do not price the product or service below its cost.
b. Monitor the competitors’ prices and ensure that your
prices are at par with them unless the product or
service is really way superior to the competitors’.
c. Align prices with the other 6Ps (product, place,
promotion, people, packaging and processing)
d. Implement price strategies that are relevant to your
market segment. For example, tingi (sachet) pricing is
more appropriate in the grassroots locality or barangay.
e. Align prices with your business objectives.
Table 4.2. Shows an example of Profit, Revenue, and Market
Share Maximization
 LET THE MARKET KNOW YOU BETTER
• 4. Promotion - Promotion is the explicit communication strategy
adopted by an enterprise to elicit the patronage, loyalty, and
support not only from its customers but also form its other
significant stakeholders. It encompasses all direct communications
efforts of the enterprise, such as advertising, public relation
campaigns, promotional tours, product offerings etc.,
• KEY MARKETING MESSAGES FOR PROMOTION:
• Value proposition & Unique selling proposition
• Product or service image
• Business image
• Business value and philosophy
 PROMOTIONAL TOOLS:
• Advertising – type of communication that influences the behavior of a
customer to choose the product or service of the entrepreneur over the
competitors. (e.g. Television, Radio, Internet, Mobile phones, Print, Out-
of-home)
• Selling – This is the act of trading a product or service for a price or a
fee.
• Sales Promotion – These are short-term promotional gimmicks wherein
practical incentives and appealing activities are incorporated to entice
the customers to buy the product or avail of the service. These are also
called “bellow-the-line” promotions. (e.g. Sales discount, raffles, contest
and games, promo items, Product or service bundles, Trade fairs or
exhibits, Sample distributions or free taste/ free trials, Premiums, Point-
of-purchase promotions, advertising specialties or rewards)
PROMOTIONAL TOOLS:
• Public Relations(PR) – These are image-building initiatives of
the entrepreneur to make the name of the business reputable
to stakeholders, such as the target customers, governments
agencies, business partners, media and the public. PR do not
directly promote product or service. These PR strategies affect
customers indirectly but they do not influence the
stakeholders to build more trust to the business. (e.g. Press
conferences, Launching events, Strong media relations through
press kits, Social responsibility events, Lobbying or good
relationships with government officials and Web public
relations or blogs, social media e-mails or word-of-mouth)
 LET THE MARKET KNOW YOU BETTER

5. People - are ultimate marketing strategy.

People sell and push the product. People search
hard to find
the right market.
 LET THE MARKET KNOW YOU BETTER
• 6. Packaging - came in small, medium, and large
sizes without much variation in the material, shape,
and purpose of the packaging. It’s the overall
identification (look & feel) of the product or service.
This will determine the uniqueness of the product
from competitors.
• Packaging’s ultimate goal is to entice customers to
purchase the product or service. Thus, the
entrepreneur should focus on pleasing the
customer’s eyes.
 LET THE MARKET KNOW YOU BETTER
7. Process – Is the last addition in the marketing mix
as marketers began to realize the importance of the
internal and external operations of the business to
serve customers better. Process is defined as a step-
by-step procedure or activity workflow that the
entrepreneur or employees follow to effectively and
efficiently serve customers. The internal process
includes the back-office operations : Preprocessing,
Processing & Post processing
FUNDAMENTAL OF BRAND MANAGEMENT

• Brand – refers to the identification of a

company, of a product, of a service, or of an
entrepreneur himself or herself. A brand is a
symbol of promise or assurance from the
entrepreneur that what its purpose to the
customers will happen.
• Brand Management – is the supervision of the
tangible and intangible elements of a brand.
FUNDAMENTAL OF BRAND MANAGEMENT

– Tangible elements include the product itself, its

packaging, price and its location.
– Intangible elements include the perception and
relationship of the customers with the brand.

• Branding – is the process of integrating the

strategies formed from the marketing mix to
give identification to the product or service.
GOALS OF BRANDING:
• Establishing to target customers that the
business is reliable and trustworthy and that
the product or service is the superior solution
to their current problem.
• Differentiating with competitors
• Driving customer loyalty and retention
 BRAND NAME MUST POSSESS THE FF
CHARACTERISTICS:
• Unique
• Extendable
• Easy to remember
• Can describe the benefits of the product or service
• Can be converted to other dialects or languages in case the
entrepreneur expands to other territories
• Can describe a product category
• Cab describe concrete qualities
• Positive & inspiring

The brand is the marketing element that sticks to the mind of the
target customers and the public. Therefore, the entrepreneur must
think critically on how to position the brand and be able to sustain it.