Polytechnic University of the Philippines

College of Business Administration

Department of Human Resource Management

Narrative Report

Marketing Management (MARK 30073)

Topic: MARKETING MIX (The 4P’s of Marketing)

Submitted by:

Allyza Faith L. Trinidad

Submitted to:

Prof. Loverly F. Revecho

2023
 Polytechnic University of the Philippines
College of Business Administration
Department of Human Resource Management

MARKETING MIX

Marketing Mix is the combination of four elements, called the 4P's (product, Price, Promotion,
and Place), that every company has the option of adding, subtracting, or modifying in order to
create a desired marketing strategy." – Philip Kotler

4P’s of Marketing Mix

PRODUCT

Product refers to the goods and services offered by the organization. Also, product can be
described as a bundle of benefits which a marketer offers to the consumer for a price.

An example of products includes a lipstick, a pair of sneakers, and a travel service. We bought or
purchase each of these because they meet one or more of our needs. We are paying for the
benefit it will offer rather than the actual product. Purchasing shoes is really an investment in our
feet's comfort, while purchasing lipstick is an investment in our appearance since it tends to
make us look better.

PRODUCT CLASSIFICATION

1. Based on use

1. Consumer Goods

• Consumer products are items that are intended for end users or families to use personally.
Products like groceries, clothing, and toiletries are included in this. The consumer items
can be further categorized as follows based on how customers choose to buy them:
 Polytechnic University of the Philippines
College of Business Administration
Department of Human Resource Management
1.1 Convenience Goods

• Consumer prod9ucts that are easily accessible and often bought with little effort are
categorized as convenience items. Since these products are usually not pricey, buyers
rarely do any comparison shopping before making a purchase.For example, Bread is a
convenient food item for a lot of customers. Customers are free to select the store where
they want to get their bread, but they will purchase any brand that the store sells.

1.2 Shopping Goods

• Shopping items are things that consumers usually take their time looking into and
compare before purchasing. These are rarely impulsive purchases, in contrast to
convenience products. When buying, consumers typically assess features like quality,
price, and style with the ones on other products. For example, an airline ticket is a
common shopping product. The cost of plane tickets can vary significantly and is
exclusively offered by airline companies. Most buyers will take their time comparing
airline tickets in order to select the one that best suits their requirements and falls within
their price range.

1.3 Specialty Goods

1. Generally speaking, specialty products are expensive, and buyers don't take the
time to compare them to other products; instead, they put in more effort when
purchasing specialty products than when purchasing other kinds of products.
Specialty products are defined as products with special characteristics or brand
identification. Typically, while buying a specialized goods, customers are very
cautious since the product has particular qualities or they appear to already be
brand loyal. Similar to bag collectors, there are occasions when the models they
desire are unavailable in the Philippines; in these cases, they may either source the
models themselves or travel outside to purchase them.

2.Industrial Goods

Products used by companies to produce other items are known as industrial goods. Since these
products are so expensive and huge, they are typically not meant for consumer use. Rather,
companies produce these items with the intention of selling them to other companies.

2.1 Raw Materials

• The supplies or inventories that a business needs in order to produce its goods are known
as raw materials. A manufacturer of automobiles, for example, would use the steel used
in their production as a raw material.
 Polytechnic University of the Philippines
College of Business Administration
Department of Human Resource Management
2.2 Machinery

• Heavy machinery or huge equipment that helps in transforming raw materials into a
completed product is referred to as capital goods. They are durable things that companies
employ to make other products and services. Examples are Machines and technology
used to produce goods and services.

2.3 Components

• The improved form of raw materials are called component materials. These are industrial
goods that have been partially processed and put together to create finished goods. For
instance, a tire is a finished good for a company, but it needs to be put together to finish a
car, bike, or other vehicle.

2.4 Operating supplies

• These are stand-in goods and services that help with the final product's creation or
management. Any temporary goods or resources needed for a company's or business's
normal operations are referred to as "supplies." ito yung mga material na ginagamit while
doing a product. Office supplies, computer supplies ganon. They never make an
appearance in the final products; they are only ever used to support business operations.
Brooms for cleaning factory floors, stationery, and lubricating oil are a few examples.

2. BASED ON DURABILITY

2.1 Durable Goods

• Products classified as durable have a lengthy lifespan and are meant to be used for a
longer amount of time—usually longer than three years. Durable goods are not purchased
by consumers as frequently, and the decision-making process is frequently taken out. In
order to attract customers, producers and merchants of durable items might concentrate
on offering financing alternatives, maintenance services, and warranties. Examples
include appliances (refrigerators, washing machines), electronics (televisions, laptops),
furniture, and automobiles.

2.2 Non-durable Goods

• Non-durable goods have a short lifespan—usually three years or less—and are eaten or
used up relatively quickly. Non-durable goods are frequently purchased by consumers
and are frequently a part of daily or weekly consumption patterns. Food and drink,
apparel, hygiene, and cleaning supplies are a few examples.
 Polytechnic University of the Philippines
College of Business Administration
Department of Human Resource Management
3. BASED ON TANGIBILITY

3.1 Tangible Goods

• Tangible goods are physical products that can be touched, seen, and physically measured.
The other categorized that are stated above will fall under tangible goods like the raw
materials, grocery, machinery, since they can be seen or even touch.

3.2 Intangible Goods

• Products classified as intangibles are those that are not tangible and cannot be touched.
Frequently, they are intellectual property or services. In essence, services are intangible
actions that satisfy needs or wants. Example of this is the computer software. we usually
purchase a software for our computer yet we cannot touch it since its a program. Also,
like availing a subscription in Spotify. You avail for a subscription that you cannot touch
yet you can listen.

PRICE
The cost of a good or service is expressed as its price. It is the marketing mix's second-most
crucial component. In reality, price is one of the most important areas to make decisions
because it affects both the company's profitability and the demand for the goods.

Setting the product's price is a difficult task. When setting a pricing, one must consider a number
of aspects, including the demand for the product, the cost involved, the consumer's ability to pay,
the rates competitors are charging for comparable goods, government regulations, etc. Also.
pricing is considered as the only revenue-generating element since it is the only one that can
provide profit to a business while the other three add to the expenses.

PRICING AND FACTORS AFFECTING PRICING DECISIONS

1. Cost

• Without revenue to support manufacturing and distribution expenses, no business

can thrive. In many cases, a fair profit margin is added to the cost to establish the
selling price. Lower the cost, lower the price; higher the cost, higher the price is probably
going to be. When deciding on a price, one must consider the costs of the product—its
inputs—including the money required for manufacturing, testing, and packaging.
Expenses for distribution and promotion also apply. As an example, the costs of
promoting a newly launched product might be extremely costly since consumers must be
made aware of it.
 Polytechnic University of the Philippines
College of Business Administration
Department of Human Resource Management
2. Demand

• Demand has a significant impact on price as well. When a product is in high

demand and there is a limited supply, consumers will purchase it even if the
producer charges excessive costs. A product's price is determined by its market
demand; if that demand is inelastic, a higher price can be fixed; if it is very elastic, less
need to be fixed. The price of goods can be raised when there is a greater demand for
them and a constant supply; whereas, if there is a reduction in demand, the price of goods
must fall in order to remain competitive. However, the amount would rely on the ability
and willingness of potential customers to pay as well as their product selection.

3. Competition

• One significant factor in pricing is the amount the competition costs for a
comparable product. For fear of losing clients, a marketer would prefer not to
charge more than the rival. Furthermore, he can refrain from offering a cheaper price
than the rival. because it can lead to a pricing war, as we've lately witnessed with regard
to soft drinks, laundry powder, cell phones, etc. Prices must be competitive without
sacrificing the product's quality in any way.

4. Marketing Objectives

• A company may have a variety of marketing goals, including increasing market

share, profit margins, sales, and market survival. Prices must be established
appropriately. For instance, a low price will be set if the goal is to increase market share
or maximize sales. To gain a larger market share, a washing powder firm recently cut its
pricing in half.

5. Government regulation

• The Essential Commodities Act governs how much the government will charge for a
number of necessities. For instance, the government set the price of steel and cement
before the economy was opened up. Therefore, it is essential that the manufacturers
consider any current laws while setting the prices of their products.
SRP

METHOD OF PRICE FIXATION

1. Cost-based pricing kasama rito yung mga ginastos para sa product.

• This method fixes the product's pricing by deducting the intended profit margin
from the product's cost. The price of a soap is set at Php8 + (8x25/100) = Php10 if the
marketer wants to make a 25% profit on a certain soap that costs Php8. When
determining the price in this manner, all manufacturing expenses—both fixed and
variable—are taken into account.
 Polytechnic University of the Philippines
College of Business Administration
Department of Human Resource Management
2. Competition based pricing.

• Price is typically set closer to the price of rival brands for products in highly
competitive markets where quality differences between brands are minimal. This
pricing strategy, known as young rate pricing, is particularly useful for marketers as it
allows them to adjust prices and demand in accordance with changes made by top
industry players.

3. Demand based pricing

• Prices are sometimes dictated by the level of demand for the product. Using this
strategy, marketers attempt to determine the product's demand without giving
much thought to costs or those of competitors. They choose to take advantage of the
great demand and set a high price. They set low prices for their product in cases of low
demand. They occasionally use differential pricing, charging various fees to different
consumer groups based on their perceived worth and ability to pay.

4. Objective based pricing

• This approach can be used when introducing new, creative items. When a company
introduces a new product, it sets a low price in an attempt to gain market share and
deter potential rivals from entering the race. This is known as penetration marketing.
As an alternative, the company may choose to "skim the market," meaning that it will
benefit greatly by preying on a certain segment of the population that places a premium
on status or distinction and is prepared to pay a premium for it. In such a scenario, they
set a rather high price for their product at launch and only sell it to clients who can afford
it.

PLACE

"Place" in the marketing mix relates to the distribution strategy, which is putting the good
or service in front of the target market via the appropriate channels. The site factor
focuses on how a business successfully and efficiently reaches the target market with its
goods or services. Customers must be able to easily purchase them from the location where they
are made available. The term "channel of distribution" refers to the network of people and
organizations that make up a company's distribution network, which includes distributors,
wholesalers, and retailers. The company must choose between selling to retailers directly and
through distributors, wholesalers, etc. It may even intend to sell it to customers directly.

TYPES OF CHANNEL DISTRIBUTION

1. ZERO STAGE CHANNEL OF DISTRIBUTION manufacturer to consumer

• In a zero-stage channel of distribution, which is also referred to as a direct

distribution channel or zero-level channel, the producer or manufacturer sells the
product straight to the final customer, cutting out any middlemen. The products
 Polytechnic University of the Philippines
College of Business Administration
Department of Human Resource Management
travel directly from the manufacturer to the consumer under this distribution model. A
close and direct relationship between the manufacturer and the end customer is what
distinguishes this strategy. Usually, the producer uses different methods to sell their
product to the consumer like online stores or physical outlets.

2. ONE STAGE CHANNEL DISTRIBUTION manufacturer - retailer - consumer

• A single middleman or intermediate acts as a mediator between a manufacturer or

producer and the final consumer in a one-stage, one-level, or one-channel
distribution system. The transfer of goods from the producer to the consumer is greatly
facilitated by this middleman. Products go from a producer to a retailer and ultimately to
the final consumer in a one-level channel. The product is purchased by the retailers from
the manufacturer and then sold to the final consumer. The one-level channel is perfect for
producers of toys, apparel, furniture, and other goods.

3. Two stage channel of distribution manufacturer - wholesaler - retailer - consumer

• Typically, wholesalers purchase products in bulk from producers and then separate
them into smaller packaging to sell to retailers. The final consumers purchase the
products from the shops. The two-level channel works well for longer-lasting, more
reasonably priced products that have a wider target market. This applies to goods where
markets are widely dispersed, individual purchases have low value, and purchases occur
often.
manufacturer - distribution agent - wholesaler - retailer - consumer
4. Three stage channel of distribution

• Manufacturers frequently employ mercantile agents, who serve as a liaison between

producers and wholesalers, when there are numerous, dispersed wholesalers in the
nation. Another name for them is distributors. The two-level and three-level channels are
comparable, with the exception that the products move from the producer to an agent and
then to a wholesaler. Agents help in marketing the products and ensuring that they are
delivered to the market on time. In addition to receiving a commission, the agents are
typically tasked with distributing products within a specific region. Products with a
nationwide target market and strong demand are appropriate candidates for the three-
level channel.

FACTORS AFFECTING THE CHOICE OF DISTRIBUTION CHANNEL

1. NATURE OF MARKET

• The choice of distribution channel is determined by a number of market factors.

Direct sales may be the best option, especially if your number of buyers is not large and
the location of your product is only a few. However, the need for middlemen may
develop if there are a lot of purchasers, each making a tiny individual purchase and they
are dispersed.
 Polytechnic University of the Philippines
College of Business Administration
Department of Human Resource Management
2. NATURE OF PRODUCT

• The product's nature has a significant impact on the distribution channel selection.
When a product is technical in nature and requires a significant amount of pre- and
post-sale services, sales are typically made through retailers without the
involvement of wholesalers. Simple goods that are less expensive and more
homogenous are often suitable for direct distribution. Complex products that are
expensive or differentiated generally require mediators. However, because most
consumer items are low-value and purchased regularly in small quantities, a lengthy
supply chain including agents, wholesalers, and retailers is required because the goods
must be kept in easily accessible places. This group includes things like groceries and
toiletries. On the other hand, direct sale is favored for expensive, high-value commodities
like industrial machines that require expert technical servicing and require a lengthy
negotiation process.

3. NATURE OF THE COMPANY

• A company with sufficient funding can afford to own both a retail location and a
distribution network. A shorter channel is preferred by the companies who want to
manage the distribution network. However, most businesses would rather focus on
manufacturing rather than building their own distribution network. Only when the
manufacturer is well-capitalized and has experience with marketing is direct selling
feasible. Direct selling is not cost-effective for a company with a single product. Direct
selling is the best option if the manufacturer wants total control over the distribution
process. The firm's distribution policy has an impact on the distribution channel selection
as well.

4. MIDDLEMAN CONSIDERATION

• It is preferable to hire middlemen who possess the appropriate experience,

relationships, financial stability, and honesty, as they can guarantee the success of
recently launched items. Since all middlemen add their own margin of profit to the
product price, cost considerations must also be taken into account. However, past
experience has shown that, in situations where sales volume is sufficient, using
middlemen is frequently more cost-effective and less time-consuming than direct sales.

PROMOTION

• A product may not succeed in its marketing efforts even if it is priced fairly,
produced with the needs of the consumer in mind, and sold in stores that are
convenient for them.

This is because the consumer may not be informed about the product's features, availability,
or pricing. Consequently, promotion—which is defined as the process of educating,
convincing, and influencing a consumer to choose the product to be purchased—is a crucial
 Polytechnic University of the Philippines
College of Business Administration
Department of Human Resource Management
component of the marketing mix. Sales promotion, publicity, advertising, and personal
selling are the methods used in promotion. Promotion, as used in the marketing mix,
describes the tactics and actions a business employs to convince the target market of the
benefits of its goods and services and to choose it over rivals' offers.

Five elements of a promotion mix

1. ADVERTISING

• Businesses pay to promote their goods or services to a large audience at once.

Advertisements are frequently seen on television, in newspapers, via direct mail, on
radio, in magazines, or online.

2. PUBLIC RELATION

• By putting engaging news articles about their operations in the media, businesses
that use public relations (PR) hope to establish a strong and appealing brand image.
The way people see a brand is determined by this kind of promotional strategy.
Nonetheless, the corporation does not have complete control over PR because some
websites and reviews could criticize the brand. If a business successfully resolves these
problems, customers will reward them with favorable word-of-mouth recommendations.

3. PERSONAL SELLING

• It describes the tactic used by salespeople to influence customers to act favorably

and purchase the goods. It is an open exhibition of the goods to customers or potential
purchasers. Personal selling is a face-to-face selling technique by which a salesperson
uses his or her interpersonal skills to persuade a customer in buying a particular product.
The salesperson tries to highlight various features of the product to convince the
customer that it will only add value. When used for industrial items, it is the most
effective advertising tactic. This exchange of messages is one-on-one between a potential
customer and a sales professional. Direct selling has an impact on consumers' decisions
to purchase particular goods or services. Because the sales representative can carefully
target the promotion to the people who are most likely to make a purchase, it is one of the
best ways to market your business. However, because businesses must cover the cost of
one employee's time, this is the priciest type of sales.

4. SALES PROMOTION

• This is a reference to temporary and short-term rewards for buying new products
or encouraging trials of them. The tool consists of discounts, trade fairs, games,
rewards, and contests. Retail levels are where sales promotion activities are typically
conducted. This is a series of quick activities meant to promote purchases right away.
Sales promotions are campaigns that use limited time offers, such as discounts, sales,
coupons, and so on, to draw in more customers and engage current ones. Even though it
 Polytechnic University of the Philippines
College of Business Administration
Department of Human Resource Management
can occasionally be the most unpleasant form of communication for consumers, many
businesses use this as the cornerstone of their marketing campaigns.

5. DIRECT MARKETING

• A type of direct-to-consumer advertising where the message is intended to prompt

the recipient to do an action, including placing an order, cutting a coupon, calling a
toll-free number, or going to a store. The target audience is typically reached at their
homes or offices. Direct marketing uses a variety of platforms and techniques to connect
with specific audiences. Usually via email, the company sends a promotion so that the
consumer has a chance to visit their site or check their product. Advertising and
promotion that goes straight to consumers, avoiding conventional middlemen like
retailers, is known as direct marketing. Establishing a direct relationship with each
customer and urging them to take a certain action—like buying something, asking for
more information, or subscribing to a newsletter—is the aim of direct marketing. Direct
marketing uses a variety of platforms and techniques to connect with specific audiences.