ENTREPRENEURSHIP

1. Product - What product or service is

THE MARKETING MIX: THE 7P’S OF the most appropriate for the opportunity,
MARKETING and why will customers buy or avail
What is Marketing Mix? them?
2. Place - What location is best suited for
 A Marketing Mix is a set of activities that the business where there are more
businesses and marketers use to help potential customers?
promote their brand or to sell a product 3. Price -What is the most appropriate
or service they offer. price, and what pricing strategies will be
 When selling a new product or service it used for the target customers?
is important to create a marketing mic 4. Promotion - What is the most effective
strategy that essentially blends the key advertisement or combination of
marketing ingredients together to advertisements, and which advertising
achieve the desired result. tool should be used to drive awareness
 The marketing mix is a widely accepted and increase sales?
strategic marketing tool that combines 5. People - What type of people need to
the original 4Ps (Product, Place, Price & be hired? What are the basic skills
Promotion) with the additional 3Ps – needed for the job?
People, Packaging, and process – In 6. Packaging - What is the best
formulating marketing tactics for a packaging for the product that is
product or service. attractive enough to customers?
 The 7Ps are controllable by the 7. Processing - What is the most
entrepreneur and therefore must be well compelling feature of the product or the
thought of to be successful. Prior to the business that will make a difference in
7Ps, the 4Ps were used in marketing the lives of the customers?
products or physical goods only.
However, these are not completely PRODUCT
applicable to marketing services; thus,  A product is any physical good, service,
the other 3Ps, which are also applicable or idea that is created by an
in marketing products are also entrepreneur or an innovator in serving
applicable in marketing products, were the needs of the customers and
introduced. addressing their existing problems.
 Only a very few products are pure  The three-level concept of products
products and only few services are pure or services summarizes the reasons
services. Therefore, the marketing mix that a customer decides to buy a
will be able to address marketing product or avail of a service.
components of both goods and services 1. Level 1: Core Benefits of the Product
or even the hybrids. or Service. The core benefits of a
 Entrepreneurs must use the 7Ps model product or service are the major factors
to do the following: conduct a situation why a customer buys a product or
analysis; set objectives; conduct a avails of a service.
strength, weakness, opportunity, and 2. Level 2: Physical Characteristics of
threat (SWOT) or competitive analysis; the Product or Service. Once the core
and ultimately come up with marketing benefit has been satisfied and options
strategies and tactics. A challenge to a
are available to the customers, the
tendency is to look for the second layer
budding entrepreneur is to ask the of selection, i.e., which has a better
following key questions at the onset: packaging for products or a better
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physical evidence or customer • Here are the Most Common Pricing
experience for services. Strategies:
3. Level 3: Augmented Benefits of a 1. Bundling - This refers to two or more
Product or Service. Augmented products or services in one reduced
benefits are only additional benefits. price (eg 3-in-1 coffee for P8.00,
However, in case of common products manicure and pedicure for P150).
and services where there are a number 2. Penetration pricing - This refers to
of competitors, the differentiator comes setting low prices to increase market
from the physical characteristics or share, but the entrepreneur will
physical evidence, the customer eventually increase the price once the
experience, or the augmented benefits. desired market share is achieved (e.g.,
Therefore, the entrepreneurs must a mobile app-based transportation
provide customers with augmented service offering reduced booking fee of
benefits that distinguish them from the P15 as its introductory price).
competitors. 3. Skimming - This is the opposite of
penetration pricing where prices are
PLACE initially high and then they are lowered
• Place also covers the product to offer the product or service to a wider
distribution and the whole business market (e.g., a real estate company
logistics. The logistics side for products offering top-tier projects is now offering
should cover production, ordering and low-cost housing of same quality to
receiving raw materials or finished serve the middle market segment).
goods from the suppliers, storage, 4. Competitive pricing - This refers to
reorder points, and transportation benchmarking prices with the
systems. The logis side for services competitors ([Link] tea prices are
covers the physical evidence or competitively priced).
servicescape, service providers, and 5. Product line pricing - This refers to
delivery process, as well as policies and pricing different products or services
procedures of the business. within a parallel product array using
• One of the major objectives of the varying price points (e.g., LED TV is
entrepreneur for place is to provide more expensive than the LCD TV even
customers with pleasant experience in if under the same brand).
buying the product or availing of the 6. Psychological pricing - This considers
service so that they will keep on coming the psychology and positioning of price
back whether on-site or online in the market (e.g., price of haircut
• The entrepreneur must devise a set of service is at P199 because consumers
criteria in choosing the right location tend to think that odd prices are
aligned with certain objectives, such as considerably lower than what they are;
suitability to the target market, condition
of the neighborhood potential of the
area for future developments, laws and in this example, they tend to round off
regulations in the area, direct and the price to P100 instead of P200).
7. Premium pricing - This refers to
indirect competitors, foot traffic, and setting a very high price to reflect elitism
cost of doing business. and superiority (e.g., prices of signature
• Price is the peso value that the clothes, bags, perfumes).
entrepreneur assigns to a certain 8. Optional pricing - This refers to adding
product or service after considering its an extra product or service on top of the
costs, competition, objectives, original to generate more revenue (e.g.,
positioning, and target market. meals on top of the air fare).
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9. Cost-based pricing - The basis of
markup is the cost of sales. For • The entrepreneur must follow these
example, the entrepreneur will compute general pricing guidelines to make the
the cost of coconut juice by adding the business sustainable and thriving:
cost of the coconut juice (P10) and the 1. Do not price the product or service
plastic container (P4). He or she can set below its cost.
the price at P20 to earn P6 per coconut 2. Monitor competitors' prices, and ensure
juice. that your prices are at par with them
10. Cost plus pricing – The markup is unless the product or service is really
based on a certain percentage of cost way superior to the competitors’.
(e.g., the entrepreneur wants to set a 3. Align prices with the other 6Ps (product,
50% markup on the coconut juice cost place, promotion, people, packaging,
which is P14 x 50% - P7; the new price and processing)
is P14+P7=P21) 4. Implement price strategies that are
relevant to your market segment. For
 The profit of an entrepreneur can be
example, tingi (sachet) pricing is more
determined only if there is a proper
appropriate in the grassroots locality or
computation of costs associated with
barangay.
the product or service
5. Align prices with your business
 There are two classifications of costs: objectives.

1. Variable costs or controllable PROMOTION

costs - These costs are directly • Promotion involves presenting the
proportional to the number of products products or services to the public and
manufactured or to the number of how these can address the public's
services performed. For example, one needs, wants, problems, or desires
of the variable costs involved in a car • A strong integrated marketing
wash business is the cost of cleaning communication plan (IMC) should be
materials. The business will incur higher devised to deliver the compelling
costs only when more customers avail messages effectively. Key marketing
of the service, or it will incur lower costs messages for promotion can be the
when there are few customers. following: (1) value proposition or
2. Fixed costs or uncontrollable costs - unique selling proposition of the product
These are costs not directly proportional
to the manufacturing of a product or to
the performance of the service. These
or service; (2) product or service image;
are usually the cost of equipment, (3) business image; or (4) business
employee remuneration, rental cost, values and philosophy. Once the key
and utilities. These are considered fixed marketing message is established, the
costs because the business will still entrepreneur must choose the right
incur these costs whether or not they promotion to deliver these message to
provide more or less. Therefore, if the the target market. The entrepreneur can
entrepreneur produces more products choose one or combination of the
and performs more services, his or her following PROMOTIONAL TOOLS:
fixed costs per unit will be lower
because the fixed cost will be allocated 1. Advertising - This is a type of
to the number of units produced or communication that influences the
number of services performed (Sim, behavior of a custo to choose the
2009). product or service of the entrepreneur
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over the competitors. The object of
advertising include the following: (1) 3. Sales promotions - These are short-
informing, educating, and familiarizing term promotional gimmicks wherein
public with the product and service practical incentives and appealing
offerings; (2) building a trustworthy activities are incorporated to entice the
image, (3) increasing sales. There are customers to buy the product or avail of
so many ways to advertise, but the the service. These are normally
challenge for entrepreneur is to choose implemented when an entrepreneur
which is the most cost-effective and needs to reach a certain sales quota to
targeted channel relay the key either recover investment or achieve
marketing message to the target better profitability. Successful sales
market. The entrepreneur can choose promotions involve time limit and sense
advertise through the following: of urgency, as this strategy enables
 Television-regular channels cable customers to act immediately to avail of
 TV Radio-AM and FM radio the promo. Longer sales promotions
 Internet-e-mails, Web sites, blogs, usually result in customers not taking
social media, search engines, podcasts advantage and not acting immediately.
 Mobile phones-text messages, mobile Here are common examples of sales
applications, mobile Internet promotions in the Philippines:
 Print-newspapers, magazines, flyers,
directories, signages, posters •Sales discounts or discount coupons
 Out-of-home-billboards, buses, bus •Raffle
stops, trains, train stations, taxis, street •Contests and games Promo items
advertisements •Product or service bundles
•Trade fairs or exhibits (e.g., wedding
2. Selling - This is the act of trading a expo)
product or service for a price or a fee. •Sample distributions or free taste/free
Once identified, he or she must do trials
further research on the target
customers know their profile and •Premiums (e.g., free toys for fast food
behavior to come up with a convincing meals)
•Point-of-purchase promotions (e.g.,
way to sell the product or service. He or display stands in grocery stores)
she must also know how to handle •Advertising specialties (e.g., pens,
objections through highlighting the notebooks, umbrellas, bags, calendars)
product benefits and directing the •Rewards (e.g., reward cards)
customers to their compelling need or
want. The entrepreneur must also know 4. Public relations - These are image-
how to close a sale by leaving a building initiatives of the entrepreneur to
convincing conclusion that will trigger make the name of the business
the customer purchase. After such, he reputable to stakeholders, such as the
or she must monitor the customers target customers, government
satisfaction, which is called the after agencies, business partners, media,
sales. Depending on the size of the and the public/Unlike advertisements,
business, the entrepreneur must decide public relations (PR) do not directly
whether to hire personnel or not. If so, promote products or services. These
he or she needs to plan for the PR strategies affect customers
recruitment and selection, training, indirectly, but they do influence the
salaries, scope of work, and stakeholders to build more trust to the
communication system. business. This stimulates the
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stakeholders to write or share positive expertise, attitude, and other
news, resulting in more effective documents (e.g.,police and NBI
marketing campaigns than regular clearance).
advertisements. Positive writeups from
journals, newspapers, Web sites or PACKAGING
 Another addition in the 7Ps is
social media, and even word-of-m
packaging. Packaging is how the
credible than traditional advertisements.
product or service is presented to
Examples of PR strategies are as
customers
following:
 Aside from this, packaging preserves
 Press conferences
the shelf life of the product or service.
 Launching events
Because of the clamor in ensuring
 Strong media relations through press
environmental protection and
kits Social responsibility events (e.g.,
preservation, many businesses begin to
charitable or community
make packages out of environment-
events)
friendly materials, not just in products
 Lobbying (e.g., good relationships with
but also in services.
government officials)
 Positioning defines where your product
 Web public relations (e.g., blogs, social
(item or service)stands in relation to
media, e-mails, word-of-mouth.
others offering similar products and
 People
services in the market as well as the
mind of the consumer.
PEOPLE
 As an important element of a brand ,
• People is one of the three additional Ps
the brand name is a major differentiator
in the marketing mix. In today's arena,
of the entrepreneur against the
people play a vital role in servicing
competitors. To be different and
customers even though the
catchy ,
entrepreneur selling physical goods. It
is not just about the quality of products
a brand name must possess the
anymore, but how employees serve
following characteristics:
Employees have become a major
•Unique
influence in the customer's buying
•Extendable
behavior
•Easy to remember
• Most of the legwork at the beginning is •Can describe the benefits of the
done by either the entrepreneur or product or service
some of her family relatives. Most •Can be converted to other dialects or
entrepreneurs only hire people when languages in case the entrepreneur
the business starts to earn. expands to other territories
• The core job of the business owner is •Can describe a product category Can
more of strategy implementation. When describe concrete qualities
the need to hire people, he or she must •Positive and inspiring
identify the specific, necessary job roles
of employees and descriptions, so they • The brand is the marketing element that
will be able to know their purpose sticks to the mind of the target
clearly and serve customer customers and the public. Therefore,
• These potential employees also need to the entrepreneur must think critically on
be well-compensated and provided with how to position the brand and be able to
benefits entrepreneur must list the sustain it.
criteria of the following job offers, as • A good positioning makes a product
well as the requirements as academic unique and makes the users think of
background, job experience, skills or using it as a distinct benefit to them.
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PROCESS
• By making sure your business has a
good process in place, you will also
save time and making due to greater
efficiency and your standard of service
to costumers will remain consistent,
which is excellent for developing a
brand reputation and costumer loyalty.
• The 7th thing mentioned in the
marketing mix “process” describes a
service of actions that are taken in
delivering the product or service to the
costumer. Examining the process
means assessing aspects such as
sales, payment system, distribution,
procedure, and managing costumer
relationships.