Lesson 4: 7 P’s of Marketing

The 7 P’s of Marketing Mix

There are several important frameworks which you can utilize for the purpose of marketing your product and services.
A very crucial structure among these is the “7 P’s of Marketing. The framework of “7 Ps of marketing” includes
product, place, price, promotion people, packaging and positioning. Realizing these P’s in the most ideal manner can
turn out to be very profitable, however, you should totally see each description of the 7 P’s first.

1. PRODUCT
The first P in the Marketing Mix is the Product. Marketing strategy typically starts with the product. Marketers can’t
plan a distribution system or set a price if they don’t know exactly what the product will be offered to the market.

Product refers to any goods or services that is produced to meet the consumers’ wants, tastes and preferences.
Examples of goods include tires, MP3 players, clothing and etc. Goods can be categorized into business goods or
consumer goods. A buyer of consumer goods may not have thorough knowledge of the goods he buys and uses.
Examples of services include hair salons and accounting firms. Services can be divided into consumer services, such
as hair styling or professional services, such as engineering and accounting.

The two (2) types of products

Consumer Goods Business Goods

The demand for consumer goods is a 'direct The demand for business goods is a
demand'. 'derived demand'. It is derived from the demand
for consumer goods, which are made using the
business goods.

The number of buyers is great. Business goods have only limited number of
buyers.
The buyers are found scattered in different The buyers are found to be concentrating in
parts of the country / world. certain regions only.

Each purchase will generally be of small Each purchase involves a very high amount (in
value. money terms).
Buying is much influenced by emotions. Buying cannot be influenced by emotions.

2. PLACE
 Place is the second P in the Marketing Mix. Place represents the location where the buyer and seller exchange goods
or services. It is also called as the distribution channel. It can include any physical store as well as virtual stores or
online shops on the Internet.
3. PRICE
The third P in the Marketing Mix is price. The price is a serious component of the marketing mix. What do you think is
the meaning of Price?
In the narrowest sense, price is the value of money in exchange for a product or service. Generally speaking, the
price is the amount or value that a customer gives up to enjoy the benefits of having or using a product or service.
Thus, customers exchange a certain value for having or using the product – a value we call price. In commerce, price is
determined by what (1) a buyer is willing to pay, (2) a seller is willing to accept, and (3) the competition is allowing to
be charged.

The Different Pricing Strategies and Its Definition

Pricing Definition
Strategies

Penetration The price charged for products and services is set artificially low in order to gain market share. Once
Pricing this is achieved, the price is increased.
Skimming A company charges a higher price then slowly lowers the price to make the product available to a
Pricing wider market because it has a considerable competitive advantage. However, the advantage tends not
to be sustainable. The high price attracts new competitors into the market, and the price inevitably
falls due to increased supply.

Competition A pricing method in which a seller uses prices of competing products as a benchmark instead of
Pricing considering own costs or the customer demand. In reality a firm has three options and these are to
price lower, price the same or price higher than competitors

Product Line The practice of reviewing and setting prices for multiple products that a company offers in coordination
Pricing with one another. Rather than looking at each product separately and setting its price, product-line
pricing strategies aim to maximize the sales of different products by creating more complementary,
rather than competitive, products. If you offer more than one product or service, consider the impact
that one product's or service's price will have on the others.

Bundle Pricing The act of placing several products or services together in a single package and selling for a lower
price than would be charged if the items were sold separately.

Premium Setting the price of a product higher than similar products. The goal is to create the perception that the
Pricing products must have a higher value than competing products because the prices are higher.

Psychological Psychological pricing is the practice of setting prices slightly lower than rounded numbers, in the belief
Pricing that customers do not round up these prices, and so will treat them as lower prices than they really
are. This practice is based on the belief that customers tend to process a price from the left-most digit
to the right, and so will tend to ignore the last few digits of a price.

Optional Pricing The company earns more through cross-selling products along with a basic core product. The main
product does not have many features (and is priced low) which can be enhanced through optional or
accessory products which are sold at premium by the same company.

Cost Plus Cost plus pricing involves adding a markup to the cost of goods and services to arrive at a selling price.
Pricing Under this approach, you add together the direct material cost, direct labor cost, and overhead costs
for a product, and add to it a markup percentage in order to derive the price of the product.

Cost Based A pricing method in which a fixed sum or a percentage of the total cost is added (as income or profit)
Pricing to the cost of the product to arrive at its selling price.

Value Based A price-setting strategy where prices are set primarily on consumers' perceived value of the product or
Pricing service.
4. PROMOTION
Promotion is the fourth P in the Marketing Mix. Promotion refers to the complete set of activities, which
communicate the product, brand or service to the user. The idea is to create an awareness, attract and induce the
consumers to buy the product, in preference over others. The following are the most common medium in promoting a
product and this is called promotional mix.

PROMOTIONAL MIX
1. ADVERTISING
• Radio
•Television
•Print
•Electronic
•Word of Mouth
•Generic
2. PUBLIC RELATIONS OR PR
In public relations, the article that features your company is not paid for. The reporter, whether broadcast or print,
writes about or films your company as a result of information he or she received and researched. Many people use the
term PR and advertising interchangeably, PR involves sharing information with the public using platforms that do not
require a payment, such as social media or through press releases shared with magazines and newspapers. PR
professionals package information and disseminate it in the hopes that it will be organically shared. The goal of public
relations is to shape public perception of a business, presenting a positive image through various strategies to its
various constituents.
3. PERSONAL SELLING
Personal selling occurs when an individual salesperson sells a product, service or solution to a client. Salespeople
match the benefits of their offering to the specific needs of a client. Today, personal selling involves the development
of longstanding client relationships.
4. SALES PROMOTIONS
Sales promotion is any initiative undertaken by an organization to promote an increase in sales, usage or trial of a
product or service (i.e., initiatives that are not covered by the other elements of the marketing communications or
promotions mix).

Sales Promotion Technique

• Free Gifts
• Free Samples
• Free Trial
• Customer Contests
• Special Pricing
5. DIRECT MARKETING
Direct marketing is a promotional method that involves presenting information about your company, product,
or service to your target customer without the use of an advertising middleman. It is a targeted form of marketing that
presents information of potential interest to a consumer that has been determined to be a likely buyer.
Forms of Direct Marketing
Brochure Catalogs Fliers Newsletters Post cards
Coupons Email Phone calls Text messages

5. PEOPLE

The fifth P in the Marketing mix is People. Your team, the staff that makes it happen for you, your audience, and your
advertisers are the people in marketing. This consist of each person who is involved in the product or service whether
directly or indirectly.
People are the ultimate marketing strategy. They sell and push the product. People are one of the most important
elements of the marketing mix today. This is because of the remarkable rise of the services industry.
6. PACKAGING
Packaging is the sixth P in the Marketing Mix. Packaging is a silent hero in the marketing world. Packaging refers to the
outside appearance of a product and how it is presented to the customers. The best packaging should be attractive
enough and cost efficient for the customers. Packaging is highly functional. It is for protection, containment,
information, utility of use and promotion.

Five Basic Functions of Packaging

1) Protection:
One of the major functions of packaging is to provide for the effects of time and environment for the natural and
manufactured products. The protection function can be divided into some classes.

A. Natural deterioration:
It is caused by the interaction of products with water, gases and fumes, microbiologic organisms like bacteria, yeasts
and molds, heat, cold, dryness, contaminants and insects and rodents.

B. Physical protection:
The packaging is also used for physical protection, which include improving shock protection, internal product
protection and reducing shock damage caused from vibration, snagging, friction and impact.

C. Safety:
A special kind of protective packaging is required for products that are deemed harmful to those who transport them
or use them. These products include extremely inflammable gas and liquid, radioactive elements, toxic materials etc.
The packaging should also be done so that children could not easily use or dispose them.

D. Waste reduction:
Packaging also serves to reduce the amount of waste especially in case of food distribution.

2) Containment:
This involves merging of unit loads for shipping. It starts with spots of adhesives on the individual shippers that stick
them together, straps of steel and plastic, entire coverings of shrinkable or stretchable plastic films and paper or
corrugated wraps that surround an entire pallet of product.

There are some special bulk boxes or pallet bins made from unusually strong corrugated board or fabricated form
plastics or metal, the method of which depends on the type and weight of product and its protective needs. The cargo
containers made of aluminum used to hold many pallet loads of goods can be transferred to or from ships, trains and
flatbed trucks by giant cranes.

3) Information:
The packaging conveys necessary information to the consumers. The common information that packaging provides
include general features of the product, ingredients, net weight of the contents, name and address of the
manufacturers, maximum retail price (MRP).

Packaging of medicine and some food products is required to provide information on methods of preparations, recipes
and serving ideas, nutritional benefits, and date of manufacturing, date of expiry, warning messages and cautionary
information. Sometimes, the color of the packaging itself provides some information.

4) Utility of use:
The convenience packaging has been devised for foods, household chemicals, drugs, adhesives, paints, cosmetics,
paper goods and a host of other products. This type of packaging includes dispensing devices, prepackaged hot
metals, and disposable medical packaging.

5) Promotion:
Companies use attractive colors, logos, symbols and captions to promote the product that can influence customer
purchase decision.

7. POSITIONING

Finally, the seventh P in the Marketing Mix is Positioning. When a company presents a product or service in a way
that is different from the competitors, they are said to be “positioning” it. Positioning refers to a process used by
marketers to create an image in the minds of a target market.
Solid positioning will allow a single product to attract different customers for not the same reasons. For example, two
people are interested in buying a phone; one wants a phone that is cheaper in price and fashionable while the other
buyer is looking for a phone that is durable and has longer battery life and yet they buy the same exact phone.

How to Create an Effective Market Positioning Strategy?

Create a positioning statement that will serve to identify your business and how you want the brand to be perceived
by consumers.

1. Determine company uniqueness by comparing to competitors

Compare and contrast differences between your company and competitors to identify opportunities. Focus on your
strengths and how it can exploit these opportunities.
2. Identify current market position
Identify your existing market position and how the new positioning will be beneficial in setting you apart from
competitors.
3. Competitor positioning analysis
Identify the conditions of the marketplace and the amount of influence each competitor can place on each other.
4. Develop a positioning strategy
Through the preceding steps, you should achieve an understanding of what your company is, how your company is
different from competitors, the conditions of the marketplace, opportunities in the marketplace, and how your
company can position itself.

Lesson 5: Developing a Brand Name

Brand Name is a name, symbol, or other feature that distinguishes a seller's goods or services in the
marketplace. Your brand is one of your greatest assets because your brand is your customers' over-all experience of
your business. Brand strategy is a long-term design for the development of a popular brand in order to achieve the
goals and objectives. A well-defined brand strategy shakes all parts of a business and is directly linked to customer
needs, wants, emotions, and competitive surroundings.

Branding is a powerful and sustainable high-level marketing strategy used to create or influence a brand.
Branding as a strategy to distinguish products and companies and to build economic value to both customers and to
brand owners, is described by Pickton and Broderick in 2001.

Commonly Used Branding Strategies

1)Purpose
"Every brand makes a promise. But in a market in which customer confidence is little and budgetary observance is
great, it’s not just making a promise that separates one brand from another, but having a significant purpose," (Allen
Adamson). How can you define your business purpose? According to Business Strategy Insider, purpose can be viewed
in two ways:

a. Functional. This way focuses on the assessments of success in terms of fast and profitable reasons. For example,
the purpose of the business is to make money.
b. Intentional. This way focuses on fulfillment as it relates to the capability to generate money and do well in the
world.
2) Consistency
The significance of consistency is to avoid things that don’t relate to or improve your brand. Consistency aids to brand
recognition, which fuels customer loyalty.
3) Emotion
There should be an emotional voice, whispering "Buy me". This means you allow the customers to have the chance to
feel that they are part of your brand.
You should find ways to connect more deeply and emotionally with your customers. Make them feel part of the family
and use emotion to build relationships and promote brand loyalty.
4) Flexibility
Marketers should remain flexible too in this rapidly changing world. Consistency targets at setting the standard for
your brand, flexibility allows you to adjust and differentiate your approach from your competition.

According to Kevin Budelmann, "Effective identity programs require sufficient consistency to be identifiable, but
sufficient variation to keep things fresh and human," so if your old tactics don't work anymore, don't be afraid to
change. It doesn’t mean it worked in the past it may still work now.
5) Employee Involvement
It is equally important for your employees to be well versed in how they communicate with customers and represent
the brand of your product.
6) Loyalty
Loyalty is an important part of brand strategy. At the end of the day, the emphasis on a positive relationship between
you and your existing customers sets the tone for what potential customers can expect from doing business with you.
7) Competitive Awareness
Do not be frightened of competition. Take it as a challenge to improve your branding strategy and craft a better value
in your brand.