Content Standard/s

The learners demonstrate an understanding of:

 Environment and market in one’s locality/town

Performance Standard/s
The learners shall be able to:
 Independently creates a business vicinity map reflective of potential market in
one’s locality/town

Learning Competency/ies
The Learners will be able to :
 Recognize and understand the market
 Describe the marketing mix (7Ps) in relation to the business opportunity and vice
versa:
a. Product e. People
b. Place f. Packaging
c. Price h. Process
d. Promotion
 Develop a brand name

Specific Learning Objectives

At the end of this lesson, the learners will be able to :
Recognize and understand the market
 Understand the Marketing mix
 Apply the 7Ps of Marketing
 Understand the Three level concept of product or services
 Enumerate and defined 4 Promotional tools.
 Understand the fundamentals in brand management.

Logistics The commercial activity of transporting goods to customers.

Workflow is a sequence of tasks that processes a set of data.
Entice attract or tempt by offering pleasure or advantage.
Benchmarking price  strategy consists of analyzing the prices of the competition, with a clear
Objective
Premiums an amount to be paid for an insurance policy.
Legwork work that involves much traveling to collect information, especially when

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 such work is difficult but boring.
Purports  the appearance of being; profess or claim, often falsely.

School supplies and module

 Looking and posting on your social media accounts everyday is now a norm. What are
the factors that compel you to like or subscribe to a brand online? What online strategy
compelled you to buy products or avail services? Write your answer in an essay.

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 the additional 3Ps – people,packaging and process
in formulating marketing tactics for a product or service. These 7Ps are employed until the
entrpreneur finds the right combination that will most effectively serve the customer’s needs
amd wants and at the same time achieves the profitability objective.

The 7Ps are controllable by the entrepreneur and threfore must be well thought of to be
successful. Prior to the 7Ps, the 4Ps were used in marketing products or physical goods only.
However, these are not completely applicable to marketing services; thus, the other 3Ps.which

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are also applicable in marketing products, were introduced. Only very few products are pure
products and only few services are pure services. Therefore, the marketing mix will be able to
address marketing components of both goods and services or even hybrids.

Entrepreneurs must use the 7Ps model to do the following: conduct a situation analysis; set
objectives; conduct a strenght, weakness, opportunity, and threat (SWOT) or competitive
analysis;and ultimately come up with marketing strategies and tactics. A challenge to a budding
entrpreneur is to ask the following key questions at the onset:

1. Product – What product or service is the most appropriate for the opportunity, and why
will customers buy or avail them?
2. Place – What location is 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?
3. Price – What is the most appropraite price and what pricing strategies will be used for the
target
customers?
4. Promotion – What is the most effective advertisement or combination of advertisements, and
which advertising tool should be used to drive awareness and increase sales?
5. 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 the entrepreneur?
6. 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?
7. Processing – What is the most compelling feature of the product or the businss that will make
a difference in the lives of the customers? What sets the product or service from
the rest?

A product is any physical good, service or idea that is created by an entrepreneur or an

innovation in service, or idea that is created by an entrepreneur or an innovation in service the
needs of the customers and addressing their existing problems. As discussed in Module 2, an
entrepreneur must first scan the environment, find a compelling service should not be created
before finding the right customers, because this is very risky and the resources and time might

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be put to waste. The three-level concept of products or services summarizes the reasons that a
customer decides to buy a product or avail of a service.

Level 1: Core Benefits of the Product or Service

The core benefits of a product or service are the major factors why a customer buys a product or
avails of a service. For examples, a customer buys coffee because he or she wants to feel
energetic and alert the whole day.

Level 2: Physical Characteristics of the Product or Service

Once the core benefits has been satisfied and options are available to the customers, the
tendency is to look for the second layer of selection, ie., which has a better packaging for
products or a better physical evidence or customer experience for services. In the previous
example, the customer can choose a coffee with a more appealing packaging or a more aromatic
smell.

Level 3: Augmented Benefits of a Product or Service

Augmented benefits are only additional benefits; a customer will still get the core benefits of a
product or service even without the augmented benefits. However, in case of common products
or a services where there are a number of competitors, the differentiator comes from the
physical characteristics or physical evidence, the customer experience, or the augmented
benefits. Therefore, the entrepreneur must provide customers with augmented benefits that
distinguish them from the competitors.

Place

The place refers to a location or a medium of transaction. A strategic location depends on the
nature of the business and the primary target market. In a physical location, the entrepreneur
must research about the area’s population, the traffic, the people’s common paths, their buying
behavior and their preferences for the location. In a cyber location, the entrepreneur must use
web analytical data to understand website performance.

Place also covers the proucts distribution and the whole business logistics. The logistics side for
products should cover production, ordering and receiving raw materials or finished goods from

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the suppliers, storage, re order points and transportation system. The logistics side of service
covers physical evidence or service scape, service providers and service delivery process, as well
as policies and producers of the business.

One of the major objectives of the entrepreneur for place is to provide customers with
pleasant experience in buying the product or availing of the service so that they will keep
on coming back whether on-site or online.

Price is the peso value that the entrepreneur assigns to a certain product or service after
considering its cost, competition, objectives, positioning, and target market. It is the only
P in the 7Ps that generates revenue for the business. Here are the most common pricing
strategies.
1. Bundling – This refers to two or more products or services in one reduced price
(e.g., 3-in-1 coffee for ₱8.00, manicure and pedicure for ₱150).
2. Penetration pricing – This refers to setting low prices to increase market share,
but the entrepreneur will eventually increase the price once the desired market
share is achieved (e.g., a mobile app-based transportation service offering reduced
booking fee of ₱15 as its introductory price).
3. Skimming – This is the opposite of penetration pricing where prices are initially
high then they are lowered to offer the products is now offering low-cost housing
of same quality to serve the middle market segment)
4. Competitive pricing – This refers to benchmarking price with the competitors
(e.g., milk tea prices are competitively priced)
5. Product line pricing – This refers to pricing different products or services within
a parallel product array using varying price points (e.g., LED TV is more
expensive than the LCD TV even if under the same brand)
6. Psychological pricing – this considers the psychology and positioning of price in
the market (e.g., price haircut service is at ₱199 because consumer tend to think
that odd prices are considerably lower than what they are; in this example, they
tend to round off the price to ₱100 instead of ₱200).
7. Premium pricing – This refers to setting a very high price to reflect elitism and
superiority (e.g., price of signature clothes, bags, perfumes)

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 8. Optional pricing – This refers to adding an extra product or service on the top of
the original to generate more revenue (e.g., meals on top of the air fare).
9. Cost-based pricing - The basis of markup is the cost of sales. For example
entrepreneur will compute the cost of coconut juice by adding the cost of the
coconut juice (₱10) and the plastic container (₱4). He or she can set the price at
₱20 to earn ₱6 per coconut juice.
10. Cost plus pricing – the markup is based on a certain percentage of cost (e.g., the
entrepreneur wants to set a 50% markup on the coconut juice cost which is ₱14 x
50% = ₱7; the new price is ₱14 + ₱7 = ₱21)

The profit of an entrepreneur can be determined only if there is a proper computation of costs
associated with the product or service. There are two classifications of costs.

1. Variable costs or controllable costs – These cost are directly proportional to the number
of products manufactured or to the number of services performed. For example, one of
the variable cost involved in a car wash business is the cost of cleaning materials. The
business will incur higher costs only when more customers avail of the service, or it will
incur lower costs when there are few customers.
2. Fixed cost or uncontrollable costs – These are costs not directly proportional to the
manufacturing of a product or to the performance of the service. These are usually the
cost of the equipment, employee remuneration, rental cost, and utilities. These are
considered fixed costs because the business will still incur these cost whether or not they
provide more or less. Therefore, if the entrepreneur produces more products and performs
more services, his or her fixed costs per unit will be lower because the fixed cost will be
allocated to the number of units produced or number of services performed (Sim, 2009).

The entrepreneur must follow these general pricing guidelines to make the business sustainable
and thriving:

1. Do not price the product or services below its cost.

2. Monitor competitors’ prices and ensure that your price are at par with them unless the
product or service is really way superior to the competitors’
3. Align prices with the other 6Ps (product, place, promotion, people, packaging and
processing)
4. Implement price strategies that are relevant to your market segment. For example, sachet
pricing is more appropriate in the grassroots locality or barangay.
5. Align prices with your business objectives.

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Promotion involves presenting the product or service to the public and how these can address the
public’s needs, wants, problems or desires. In promotion, the primary target market should be
identified because it will become the main audience. The main goal of promotion is to gain
attention.

A strong integrated marketing communicating plan (IMC) should be devised to deliver the
compelling messages effectively. Key marketing messages for promotion can be the following:

1. Value proposition or unique selling proposition of the product or services;

2. Product or service image;
3. Business image
4. Business values and philosophy.

Once the key marketing message is established ,the entrepreneur must choose the right
promotion tools to deliver these message to the target market. The entrepreneur can choose one
or combination of the following tools.

1. Advertising – this is a type of communication that influence the behaviour of the

customer to choose the product or service of the following:
 Informing, educating and familiarizing the public with the product and service
offerings
 Building and trustworthy image and
 Increasing sales.

The entrepreneur can choose to advertise through the following:

 Television – regular channels, cable TV.

 Radio – AM and FM radio
 Internet – e-mails, Web sites, blogs, social media, search engines and podcasts.
 Mobile phones – text messages, mobile application, mobile internet
 Print – newspapers, magazines, flyers, directories signage and posters
 Out-of-home – billboards, buses, bus stops trains, train station, taxis and street
advertisements.

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 2. Selling – this is the act of trading a product or service for the price or a fee. The
entrepreneur must identify the target customers who will likely buy the product or
service. Once identified he or she must further research on the target customers to know
their profile and behavior to come up with a convincing way to sell the product or
service. He or she must also know how to handle objections through highlighting the
product benefits and directing the customers to their compelling need or want. The
entrepreneur must also know how to close a sale by leaving a convincing conclusion that
will trigger the customer purchase. After such, he or she must monitor the customer’s
satisfaction, which is called the after sales. Depending on the size of the business, the
entrepreneur must decide whether to hire personnel or not if so, he or she needs to plan
for the recruitment, training, salaries, scope of work and communication system.
3. Sales Promotions- these are short-term promotional gimmicks wherein practical product
or avail of the service. these are also called “below-the-line” promotions. These are
normally implemented when an entrepreneur needs to reach a certain sales quota involve
time limit and sense or urgency, as this strategy enables customers to act immediately to
avail of the promo. Longer sales promotions usually result in customers not taking
advantage and not acting immediately. Here are common examples of sales promotions
in the Philippines:
 Sales discounts or discount coupons
 Raffles
 Contests and games
 Promo items
 Product or service bundles
 Trade fairs or exhibits
 Sample distributions or free taste/free trials
 Premiums (e.g., free toys for fast food meals)
 Point-of-purchase promotions (e.g., display stands in grocery stores)
 Advertising specialties (e.g., pens, notebook, umbrellas, bags, calendars)
 Rewards (e.g., reward cards)
4. Public relations – these are image building initiatives of the entrepreneur to make the
name of the business reputable to stakeholders, such as the target customers, government
agencies, business partners, media and the public. Unlike advertisements, public
relationship (PR) do not directly promote products or services. These PR strategies affect
customers directly, but they do influence the stakeholders to build more trust to the
business. Examples of PR strategies are as follows:

 Press conferences
 Launching events
 Strong media relations trough press kits
 Social responsibility events (e.g., charitable or community events)
 Lobbying (e.g., good relationships with the government officials)
 Web public relations (e.g., blogs, social media, e mails, word-of-mouth)

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 People

People is one of the three additional Ps in the marketing mix. In today’s marketing arena, people
play a vital role in servicing customers even though the entrepreneur sells only physical goods.
With the influx of various competing products and services , one of the major differentiators is
how people or employees make a difference in the lives of the customers. Employees have
become a major influence in the customer’s buying behavior.

Most of the legwork at the beginning is done by either the entrepreneur or some of his or her
family relatives. Most entrepreneurs only hire people when business starts to expand. The core
job of the business owner is more of strategy implementation. When the need arises to hire
people, he or she must identify the specific, necessary job roles of employees and their
description, so they will be able to know their purpose clearly and serve customers well. The
entrepreneur must list the criteria of the following jobs offers, as well as the requirements such or
expertise, attitude, and other documents (e.g., police and NBI clearance)

Packaging

Another addition in the 7ps is packaging. Packaging is how the product or service is presented to
customers. It is the overall identification of the product or service. this will determine the

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uniqueness of the product from the competitors. This is the first element that customers see
because they don’t know what’s inside yet. Aside from this, packaging preserves the shelf life of
the product or service. because of the clamor in ensuring environmental protection and
preservation, many business begin to make packages out of the environment-friendly materials,
not just in products but also in services.

Packaging’s ultimate goal is to entice customers to purchase the product or service. Thus, the
entrepreneur should focus on pleasing the customers eyes. It is not just limited on the product or
service alone, but on its totality, including its accessories, after sales service, and warranty.

As one of the additional Ps in the marketing mix, packaging plays a vital role in persuading a
customer to try a product or avail of the service based on what he or she has seen. In fact,
packaging sometimes matters more than the product or service itself. Indeed, it must please the
eye of the beholder.

Process

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 efficient serve customers. Its components include input, throughput, and output.
The internal process includes the back-office operations wherein employees or machines process
customers request without necessarily being seen by the customer. The external process includes
the actual servicing where customers are part of the process.

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 Fundamentals of Brand Management

A brand refers to the identity of the company, of a product, of a service, or of an entrepreneur

himself or herself. A brand is a symbol of a promise or assurance from the entrepreneur that what
it purports to the customers will happen. A good brand not just entices customers to try the
product but makes them loyal to it.

Brand Management is the supervision of the tangible and intangible elements of a brand. The
tangible elements include the product itself, its packaging, its price, and its location. The
intangible elements, on the other hand, 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 an
identity to the product or service. The goals of branding include the following:

 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 customers loyalty and retention.

With strong branding, customers will feel that they are safer in using the products or availing the
service and that the risks are minimal or low. If two products will be offered, the customer will
likely will likely choose the one from a reputable brand. Promoting the brand is also is also the
same as promoting the product or services.

As an important element of a brand, the brand name is a major differentiator of the entrepreneur
against the competitors. To be different and catchy, a brand name possess the following
characteristics.

 Unique
 Extendable
 Easy to remember
 Can describe the benefits of the product or service
 Can be converted to other dialects or language in case the entrepreneur expands to the
other territories

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  Can describe a product category
 Can describe concrete qualities
 Positive and 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.

Can you name the top brand that first comes to mind when these generic products or services are
mentioned? Why do you think they are the top-of-mind brands?

1. Toothpaste 11. Soft drinks

2. Soap 12. Fast food restaurant
3. Coffee 13. Convenience store
4. Milk 14. Potato chips
5. Car 15. Smartphone
6. Rubber shoes 16. Cookie
7. Mall 17. Chocolate
8. Spa 18. Television
9. Beauty salon 19. TV station
10. University 20. Refrigerator

Go to the website listed to read an article from Entrepreneur. Learn how a successful
entrepreneur shares his marketing strategies and tactics.
http:// www.entrepreneur.com.ph/startup-tips/a-successful-entrepreneur-share-his-marketing-
strategies (last accessed on 27 October 2015)

1. Choose a Philippines social business enterprise from the internet that aims to solve a
compelling societal problem.
2. Review its web site and its marketing initiatives.
3. If you were the marketing manager of that social business enterprise, what will your
marketing campaign look like using the marketing mix and brand management concepts?
Explain your rationale with the strategies devised. Submit this is in a essay format.

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Rubric Scoring
Performanc Insufficient Average Good Excellent Score
e Area (0 – 3 points) (4 – 6 points) (7 – 8 points) (9 – 10 points)
Clear and well-
There is
There is no clear or What you are expressed with
somewhat
Ideas and specific explanation writing about is specific examples
explanation in
Content in answer to the clear and well- to demonstrate
answer to the
question. expressed. what you learned.
question.
Well done!
Your answer
Some terms included some of All terms are fully
No terms from the from the lesson the terms from defined and used
Use of terms
lesson are used. are not properly the lesson that in the proper
used. applied to the context.
question asked.
Organization Organized,
Well-organized,
Organization and and structure coherently
Organizatio coherently
structure detract somewhat developed, but
n developed, and
from the answer. answers the difficult to
easy to follow.
question. follow.
Timeliness Submitted Submitted Submitted Submitted on or
8-10 days late. 4-7 days late. 1-3 days late. before the
deadline.
 TOTAL        

Resources :
Batisan, R. (2016). Diwa Learning System Inc. Legaspi Village, Makati City, Philippines

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