UNIT 4: DEVELOPING THE

MARKETING MIX
GROUP 4
LESSON 1: PRODUCT
OBJECTIVES:
At the end of this lesson, the student will be able to:
Define a product

Enumerate and describe the parts of a product

Classify Products

Explain the process of developing new products

Discuss the product line and product life cycle

Discuss the marketing strategies for service firms

PRODUCT
are tangible objects that a company sells to
customers for their use or consumption. these
products are expected to satisfy customer's
needs and wants. customers include both
consumers and business buyers.

SERVICES
are also sold by a company to a set of
customers. However, unlike products, services
tend to be intangible; they are directly delivered
to the customers by a company;s employees
Finally, these services and
products all contribute to the
customer's overall experience
with a company
Levels of a product

1. Core product
refers to the benefit that a
consumer can gain from using a
product. it can thus be considered the
main reason for purchasing a
product.
Levels of a product

2. Actual Product
corresponds to the tangible
characteristics of the product,
including its features and
packaging.
Levels of a product

3. Augmented Product
refers to the service-based
add-ons that the customers are
entitled to upon purchasing the
product.
 CLASSIFICATION OF PRODUCTS
These types of goods are primarily distinguished based on (1) who purchases
them and (2) why they are purchased.

Consumers goods
are products and services purchased by customers
for their own use, and are thus frequently purchased.

Industrial goods
are purchased by businesses and are used in the
creation of new product which shall be eventually
sold to others. Industrial goods include capital goods
such as heavy equipment and raw materials which
are further processed or modified in order to become
a new product.
NEW PRODUCT DEVELOPMENT
A process that involves the
conceptualization and creation of
innovative products that will catch the
attention of customers and ensure their
loyalty to a particular brand. Developing
new products often requires extensive
research and labor on the part of a
company or firm.
In this first stage, the company searches for and surveys new ideas
to be used in developing a product. this can involve the company's
sales and executive teams to generate ideas based on market trend
research. scientists can also contribute to the generation of ideas.
This is the stage when the ideas generated by the company's sales and
science expert are carefully scrutinized to retain only those ideas
which have the potential for a successful sales performance, and
eliminate those which may fall.
once an idea for a new product is selected, it is now further developed
as a concept. it is assumed at this stage that the product has at least a
hypothetically high chance of succeeding in the market.
the next step is to plan how it will be marketed. The target market is
concretely identified and characterized, and the profit objectives are
planned. sales projections are made, as well as the costs and profit
estimates from the product.
at this stage, the concept is developed into a product prototype. this stage
involves the efforts of both the marketing and research departments of
companies.
its marketability is tested with a particular group of customers in a
specific location. the reactions of customers towards the product are
then gathered and analyzed. in turn, this will help address any problem
concerning the marketability of the prodcut before it is officially
introduced to potential customers.
after the product prototype has been tested, the company or firm will
make its final decision on launching the product. commercialization can
be a soft launch or full-scale launch
Soft launch
the product will be tested with limited number of customers. soft launch
may involve prince discounts and lower-budget promotion schemes, like the use of
flyers and brochures. after the soft launch the responses of the potential customers
are again recorded and analyzed.

Full-scale launch
this serves as the official launching of the product. it involves the extensive
utilization of the components of the 4Ps. the products is sold at its official price,
and it is marketed heavily through various means, such as posters and
advertisements on television and online.
PRODUCT LINE
it is a group of similar products offered by the same company under the
same brand. the products in a product line may differ in their sizes,
variants, or flavors. they may also differ in their specific types, but are all
under a general class.
marketing a products line attracts more customers as they have varying
preferences and needs.
marketers are expected to closely monitor the performance of each
product in the product line. unprofitable ones are eventually dropped
from the line to avoid losses. this is also done to protect the image of the
product's brand.
 INTRODUCTION
the stage when the product is launched
PRODUCT MATURITY
at this stage, the product has
in the market. companies spend great
been in the market for a long
amounts of money to develop and L period and competition has also
introduce their products to customers.
thus, marketers are expected to find ways I increased.
to launch products in the best way
possible, without incurring large costs. F
E DECLINE
this is the stage when the profits and
GROWTH sales for the product continue to

this is the stage when the product

CYCLE decrease. with this, companies and
firms may be left with no choice but to
gains acceptance in the market, the
ultimately drop the product, in order
profits from the firms or company
to avoid incurring huge cost and low
start to increase.
profit.
MARKETING STRATEGIES FOR SERVICE FIRMS
services are considered a different type of purchase; they involve contact between the
customer and an employee who provides the service.
Selecting and Training Employees
These employees must then be trained and oriented to meet the needs of the
customer
Delivering high quality service
This will lead to the satisfaction of customers.
Building a Strong and Loyal Customer Base
When customers are satisfied with a service, they will most likely recommend it
to other people
Associating Effective Customer Service with Employee Motivation
Lead to greater productivity and motivate employees to put more effort in
delivering services to customers.
LESSON 2: PRICING
OBJECTIVES:
At the end of this lesson, the student will be able to:
Define a product

Enumerate and describe the parts of a product

Classify Products

Explain the process of developing new products

Discuss the product line and product life cycle

Discuss the marketing strategies for service firms

 Price
the set amount customers have to
pay to purchase a product.
Marketers must link the price to the
product's real and perceived value,
while also considering supply costs,
seasonal discounts, competitors'
prices, and retail markup.
 PRICING APPROACHES
Cost-based pricing
the fixed and variables costs are determined as the basis of the selling price.
are direct expenses on materials and labor that are utilized in the
production
are expenses which firms cannot do away with regardless of production value.
Mark-up the value that a player adds to the cost price of a product.

Sales Forecast estimates the quantity of goods that can be sold within a specified period and the
accompanying costs and the predicted profits
Demand Forecast estimates the market demand of a good in the future.

Break-even point when company's revenues are equal the expenses, can also be determined based on the
fixed and variable costs
 PRICING APPROACHES
Perceived Value pricing
product's process are set based on how the customer feels if he/she will
attain the goods, which determines the willingness of the customer to pay
for the product.

Competitive pricing
prices are based on the competitor's price on the same goods. Some
companies become the market leaders in an industry and eventually set
price standard
 FACTORS
Marketing Objectives
companies set as part of their marketing strategy in the promotion of their goods
to customer to maximize profit.
Research and development cost
companies invest in research and development in the conceptualization of their
goods.

Market structure
a uniform price is set for all sellers.

Laws
laws passed by the government should also be considered in pricing the goods.
 FACTORS
Elasticity of Demand
prices are also affected, wherein the relationship between consumer demand
and the changes in the price of goods.

INELASTIC DEMAND
ELASTIC DEMAND
consumers do not
consumers respond
respond to a
to a change in price
change in price

PERFECTLY ELASTIC PERFECTLY INELASTIC

DEMAND DEMAND
consumers find a more
goods that are experienced
favorable substitute to the
increased prices but still
product so a slight change
elicit the same demand
in price might compel a shift
from consumers
in their preference
 PRICING SCHEMES
Product Bundle Pricing
individual products put together to
create one whole bundle or set when
offered to customers,

Main/Captive Product Pricing

charges a lower price but additional charges go
with it.

Product Line Pricing

involves the separation of goods and their variations into
categories by creating price gaps to emphasize
differences in quality.
 PRICING SCHEMES
Market Penetration Pricing
low initial price is set to attract
customers, improves sales, and
eventually eliminate competition.

Market Skimming
involves setting a higher price for a product to gain
as much profit as possible before the number of
competitors for the same product increases.
LESSON 3: PLACE
OBJECTIVES:
At the end of this lesson, the student will be able to:
Discuss the meaning of channel of distribution

Identify the two main types of channel of distribution

Describe retailing and the different types of retailers

Discuss wholesaling and the types of wholesalers

PLACE

known as the Channel of Distribution.

this is where customers can buy or get

the product.
Marketing Intermediaries

are individuals or groups of

individuals who link the
producers/manufacturers to other
intermediaries or consumers.
 Distribution Intensity

Intensive is when the product needs many intermediaries.

Selective is when there are few intermediaries needed.

Exclusive is when only one intermediary is needed.

 Retailing
"refers to all activities involving the sales of goods or services directly to the
final consumers." -American Marketing Association

Retailers
Individuals who are engaged in retailing.
Link between the wholesalers and the consumers.
Only cater to customers in limited area.
 Retailing as Part of Philippine
Culture: Sari-sari Stores
small retail shop found in neighborhoods
that cater residents of a particular
community.
retailing is less formal and offers limited
products.
accessible and avail products on credit.
carry basic necessities
offer goods per piece and most of them are
packed in sachets.
 Retailing as a Business
Retailing is an important part of formally
established and widely-recognized businesses. These
businesses offers a wide range of products and
brands to choose from. Businesses may offer
retailing services either in Physical Stores or Online
Mediums.
 Retailing as a Business
Retailing can be performed as a formal business in:

SUPERMARKET DRUGSTORES DEPARTMENT STORES

CONVENIENCE STORE HYPERMARKETS NON-STORE RETAILING

SUPERMARKETS
Most common form of retailing
because there is low manpower
requirement and high-efficiency.
It utilizes a self-service approach.
Use free-standing blocks of
shelves to display goods and sign
boards indicating the goods
category.
DRUG STORES
composed of pharmacies which are
found in supermarkets or malls, or as
stand-alone stores in convenient
locations.
Sell prescription and over-the-
counter drugs.
DEPARTMENT
STORES

Refer to large stores which

offer a variety of products
that are organized into
departments or areas.
CONVENIENCE
STORES
Retail stores which carry a limited
number of goods, such as
commonly purchased items.
Usually located where
supermarkets are not readily
accessible and where there is
customer traffic.
HYPERMARKETS
Huge superstores that offers a
greater variety of products.
Bigger and more spacious than
supermarkets.
Shopping malls put hypermarket as
satellite branches, typically in
location with high consumer traffic
or at other towns.
NON-STORE
RETAILING

This approach in retailing

involves the selling of goods in
mediums outside a physical
store.
one of the common forms is
online retailing.
 Wholesaling
includes all activities involved in selling products to merchandisers or
producers for business use.

Wholesaler
classified as middlemen who purchase goods from producers
or manufacturers and sell them to retailers or directly to
consumers.
 2 Types of Wholesalers

MERCHANT FULL-SERVICE

provide a wide range of

buy goods in bulk services to their
from producers and customers such as
then resell them to recruitment of
salespeople, conducting
retailers with a inventory, and delivery
mark-up. goods. Have a higher
Sometimes referred income than merchant
wholesalers but the cost
to as Distributors.
of their operations.
Types of Wholesalers
4 Types of Full-
General Merchandise
service Wholesalers
Wholesalers
offer a wide variety of goods.
Their products include non-
perishable goods such as
cosmetics, laundry detergents,
and cigarettes.
4 Types of Full-
Limited Line
service Wholesalers
Wholesalers
provide an assortment of goods
that are limited to a few specific
product lines but offer a broad
selection of items.
4 Types of Full-
Specialty Line
service Wholesalers
Wholesalers comprised only of a single product
line but offer extensive customer
services for the products. Rack
Jobber - type of speciality line
wholesalers who maintains the
displays and stock of goods in retail
stores. Usually handle non-food
items.
4 Types of Full-
Brokers and
service Wholesalers
Wholesalers
also considered wholesalers.
Brokers facilitate the purchase and
sale of goods between buyers and
sellers, acting as a third party in
transaction. Agents acts in behalf of
one transacting party.
LESSON 4: PROMOTION
OBJECTIVES:
At the end of this lesson, the student will be able to:
Identify and discuss the elements of promotion

discuss relevant promotional tools

discuss the advertising, its objectives and various styles

discuss how effective promotion impacts product performance and sales

evaluate how companies conduct promotion

 PROMOTION
which also called marketing
communication. This comprises the
activities done to increase the target
customers' knowledge of the product
or service
BUDGET
 METHOD 1
Allocate a set of
percentage of the sale
(or, alternatively, the
net profits).
METHOD 2

Examing a
competitor's budget
METHOD 3
Plan out the
different tasks and
types of promotion
ADVERTISING
nonpersonal form of
communication, meant to bring a
product or service to the
attention of potential or current
customer .
 REACH
is the percentage of the target market who is
exposed to a particular advertisement.

FREQEUNCY

is the number of times the target audience is

exposed to the message.

IMPACT

is the value of the exposure to the target

audience.
 COMMON MEDIUM

Print ad Internet

Television
Billboard
2 TYPES OF WEBSITE
INTERMEDIARY WEBSITE
acts as gateway to differenr content.

DESTINATION WEBSITE
provides information on specific subjects,
products, and services
 OBJECTIVE
To inform - informing target customer about a
new product, new feauture, or an added benefit
of a product.
To persuade - persuade customers to buy a
product
To compare - comparing one brand to another
To remind - helps in brand recall and reminds
customer about the product from time to time
ADVERTISING MESSAGE CAN BE
EXPRESSED THROUGH THE FOLLOWING
EXCUTION:
1. LIFESTYLE
This shows how a product fits a certain lifestyle.
2. SLICE OF LIFE
This depicts scenarios where the product is used in
normal, day-to-day setting.
3. FANTASY
This depicts idealized or even exaggerated effects of the
product/services, allowing the customer to fantasize about such
scenarios.
4. MOOD
This attempts to build a mood or thematic
atmosphere around a product or service.
5. MUSICAL
This expresses the mesage of ad through music.
6. TECHNICAL/SCIENTIFIC EVIDENCE
This uses technical knowledge or scientific evidence to assert a
product's superiority over its competitors.
7. TESTIMONIAL
This features an individual or group of people giving positive on the
product, attesting to the products's high quality.
 PERSONAL SELLING
is face-to-face technique
wherein the salespersonuses
his or her persuasive skills to
convince a customer to buy a
particular goods or services
 SALES PROMOTION
consists of sales activities which help increase
for a product or service. There are two types
of sales promotion:
- CONSUMER SCHEMES
- TRADE PROMOTIONS
CONSUMER SCHEMES
Sales promotions intended for individual costumers.
Examples:
Discount coupon for specific period only
Patronage rewards

TRADE PROMOTIONS
Sales promotions intended for wholesalers, retailers, and distributer
Examples:
Freebies Commissions
Incentives
PUBLIC RELATION
practice of communicating with the
media and the general public in order
to establish a strong relationship
between target audience and business.
The primary objective is to ensure that
public opinion remains positive.
DIRECT MARKETING
is a form of marketing and advertising in
which a business communicates and
interact with its target audience directly,
without "middleman" and intermediary
entities, such as retailers, distributors, or
wholesaler.
CASE STUDY
 NIVEA's Application of the Marketing Mix in Product Launch

NIVEA is an internationally recognized manufacturer of high-quality skin and beauty care

products. Beiersdorf produces and markets a variety of brands. Beiersdorf, founded in 1882, has grown to
become a global leader in skin and beauty care. Beiersdorf's current market research program disclosed a
market gap.
As a result, NIVEA Visage Young was launched in 2005 as part of the NIVEA VISAGE range, which
offers a comprehensive selection of products aimed at young women. It carries the NIVEA brand image's
strength to the target market of girls aged 13 to 19. NIVEA VISAGE YOUNG assists young girls in
developing a proper skin care routine to keep their skin looking healthy and beautiful.
Beiersdorf launched NIVEA VISAGE Young after identifying a market gap and using an effective
balance for a right product, price, promotion, and place. Beiersdorf needed to create a mix that was
appropriate for its product and target market while also meeting its very own business objectives.
Product
NIVEA uses market research to target key market segments which identifies groups of people with the same characteristics such as
age/gender/attitude/lifestyle. The knowledge and understanding from the research helps in the development of new products. NIVEA
carries out its market research with consumers in a number of different ways. These include:

using focus groups to listen to consumers directly

gathering data from consumers through a variety of different research techniques
product testing with consumers in different markets.

Price
On re-launch the price for NIVEA VISAGE Young was slightly higher than previously. This reflected its new formulations, packaging and
extended product range. However, the company also had to take into account that the target market was both teenage girls and mums
buying the product for their daughters.
As NIVEA VISAGE Young is one of the leading skin care ranges meeting the beautifying needs of this market segment, it is effectively the
price leader. This means that it sets the price level that competitors will follow or undercut. NIVEA needs to regularly review prices should
a competitor enter the market at the ‘market growth’ point of the product life cycle to ensure that its pricing remains competitive.
Place
NIVEA VISAGE Young aims to use as many relevant distribution channels as possible to ensure the widest reach of its products to its target
market. The main channels for the product are retail outlets where consumers expect to find skin care ranges. Around 65% of NIVEA
VISAGE Young sales are through large high street shops such as Boots and Superdrug. Superdrug is particularly important for the ‘young-
end’ market. The other 35% of sales mainly comes from large grocery chains that stock beauty products, such as ASDA, Tesco and
Sainsbury’s. Market research shows that around 20% of this younger target market buys products for themselves in the high street stores
when shopping with friends.

Promotion
The promotion of NIVEA VISAGE Young is consumer-led. Using various below-the-line routes, NIVEA identifies ways of talking to
teenagers (and their mums) directly. A key part of the strategy is the use of product samples. These allow customers to touch, feel, smell
and try the products.
NIVEA VISAGE Young launched an interactive online magazine called FYI (Fun, Young & Independent) to raise awareness of the brand.
The concept behind the magazine is to give teenage girls the confidence to become young women and to enjoy their new-found
independence. Communication channels are original and engaging to enable teenagers to identify with NIVEA VISAGE Young. The
magazine focuses on ‘first time’ experiences relating to NIVEA VISAGE Young being their first skincare routine.
THANK YOU