Marketing Mix: The 7P’s of Marketing. cONTENTS. Marketing Mix Buyer Behavior Assembling the Marketing Mix Diagnostic Marketing Mix Marketing Plan 4S’s in Marketing Plan. Marketing mix. The Marketing Mix is one of two interrelated components of strategy
cONTENTS Marketing Mix Buyer Behavior Assembling the Marketing Mix Diagnostic Marketing Mix Marketing Plan 4S’s in Marketing Plan
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.
The 7P’s Product Place Promotions Price People Physical Appearance Process
Product To satisfy the needs and wants of the target market.
Place To make the product conveniently available to the target market consistent with their purchasing pattern.
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
Price To make the product affordable to the target market and reflect the value of benefits provided.
People They are the target consumers of the company. They are the ones who are the consumers.
Physical Appearance Physical appearance is the first distinction of a product. A product could be easily recognized by it’s appearance.
Process The process of the product is essential in marketing. This determines the capability of the product to supply the demand of the consumers.
Summary Product, place and people are considered as the strategic Ps of marketing mix since they cannot be changed overnight. Promotions, price, process and physical appearance are considered as the tactical Ps of marketing mix because these can be changed more easily.
Marketers of consumer packaged goods such as food and personal care products sold in supermarkets would often add “Merchandising” as another component of the marketing mix. Merchandising aims to extend advertising message at the point of purchase (POP) by generating superior presence within the store. Many companies uses store signs, posters, price tags, shelf takers and island displays. Companies spend a significant 1% of their sales on merchandising.
Buyer Behaviour An important component of the consumer purchase decision-making process. The Factors Influencing Buyer Behaviour in Consumer Markets: Cultural Factors Social Factors Personal Factors Psychological Factors
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.
Social Factors Reference Group – High-end brands like Nike shoes or acquiring a Globe cellphone 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.
Personal Factors Age and life cycle – Retirees are the prime market for many luxury cruises, as it is consistent with the slow, relaxing pace they desire. Occupation – Pamper Uni are bought by working mothers who cannot afford to rest in the morning. The International School targets children of expatriates. Economic Circumstances – Network marketing offers equal opportunity to those who want to start and grow their own business without the large capital involved in putting up traditional businesses. Lifestyle – Kraft imported cheese and Lazy Boy chairs are examples of lifestyle products. Personality and Self-concept – Premium brands like Rolex, cars and even clothes are driven by how the buyer looks at himself of herself.
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.
Assembling the Marketing mix Before a marketing mix is formed, there must be an analysis and definition of target customers. In the Macro level, market segmentation answers the question “What are the groupings of similar customers?” 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?”
In satisfying customers, marketers must not assume who the decision maker is or the mistake may be costly for the firm. Marketers must consider the more complex DMU’s that are usually involved in the decision making process (DMP) for most products and services. Marketers must therefore consider the initiator, influencer, decider, buyer and the user for every purchase – not just the user. The general characteristics of the firm’s marketing mix is shaped by the target market’s preparedness to adopt a product. Marketers usually make use of several market researches to understand their customers better. One of the most popular and widely used market research report is called Usage, Attitude and Image (UAI) survey.
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.
In the Philippines for instance, some 92% of our nationwide population belongs to the lower income D and E class and these “consumers” may be looking for very basic products. The new definition of “Quality” is that which conforms to consumer’s specification, measured through indicators of customers satisfaction, rather than indicators of self-gratification. It is consumers who decides on quality not the company. After product quality is defined, it’s inseparable twin, price, is defined to ensure an appropriate product value.
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 Value (Competitiveness) Program (Marketing)
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
2. Selling - Driven Some companies are selling driven especially when products are only available through the salesman.
3. Sales Promo - Driven Other companies that are sales promo driven are fast food parlour's like Jolibee and McDonalds which have at least eight major promo campaign yearly to bring back consumers to the store as often as possible.
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.
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.
Diagnostic Marketing Mix Diagnostic marketing mix entails the matching of correctly defined marketing problems with the proper marketing solution.
The marketing mix of a company seldom stays the same. Marketers must therefore have a systematic way of reviewing what worked and why, what didn’t work and why. Answering these queries are a prerequisite before planning what should be added or what should be dropped in order to attain, enhance or maintain competitive edge.
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: It is valuable in the marketplace It is superior in the marketplace It is difficult to match or imitate It is difficult to substitute It is difficult to trade and gain
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.
Format of a Marketing Plan Executive Summary Business Review (performance of the previous years) Environmental Analysis Key Factors for Success Strengths and Weaknesses Analysis Threats and Opportunities Analysis Market Segmentation Marketing Objectives and Goals Marketing Strategy Product Positioning Customer Satisfaction Strategy Preferred Brand Strategy Contingency Plan Marketing Budget Marketing Implementation Guide Appendix
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 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.
Selective – the marketer must be able to consider all potential alternatives of each marketing mix before short-listing all possible combinations of the marketing mix that can meet their marketing objectives. The one that can provide the best profitability is the one logically to be chosen. This is not easy as there are literally millions of combinations. But the least the marketing man can do is to short list the more obvious one and apply due diligence in planning each possible option.
Synchronize – when the marketing mix is selected, the different elements must combine harmoniously for the brand become successful. For example, a marketer cannot choose to invest in heavy advertising of a low quality product sold on a high price. In such a case, the elements of the marketing mix is not logically synchronized. Sustainability – the marketing mix that is finally chosen must be able to last in the long term vis-à-vis competition. For instance, a lower price strategy not only risks a price war but is not sustainable unless the firm is the cost leader in the industry.