Unit 6
ELEMENTS OF MARKETING MIX
Key Objectives


Understand and develop marketing strategies by applying the concept of 4 P’s.
Understand and develop strategies by applying the concept of the 3 P’s under Service

Marketing.
Understand the difference and importance of logo, trademark and branding.
A
The Marketing Mix – 4 P’s
Every business, in some ways or another, needs to market their products or services to their
target consumers. The Marketing Mix – the 4 P’s combines the various factors in such a way
that both the company and consumers objectives are met.
The entrepreneur must understand the wants and needs of its target market (consumers) and
then use the elements in the Marketing Mix in constructing appropriate marketing strategies
that will satisfy the consumers’ needs.
The elements of Marketing Mix – 4 P’s include:

Product

Price

Promotion

Place
B
Product
When a business introduces a product into a market, there are various factors to consider:
a)
Does the product look and feel right?
b)
What special features does it have to benefit the customers?
c)
Who is the product aimed at?
d)
Is it attractively and appropriately packaged?
e)
f)
Does it meet the expectations of the customers?
How do they plan to position the product within the market?
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A Product is anything that can be offered to a market for attention, acquisition, use or
consumption and that might satisfy a want or need.
It includes physical objects, services, events, persons, places, organizations, ideas or some
combination.
An entrepreneur must know what makes his/her product or service different and stand out
from the competitors. This is the competitive advantage of the business. Successful marketing
encompass communicating both features and benefits of the product or service to its target
market.
C
3 Levels Of Product
Regardless of whether a consumer or industrial product is bought, 3 levels of benefits are
obtained from the product:
a)
The core product benefits – what is the customer really buying?
b)
The actual product benefits – packaging, brand name, features, quality
c)
service, design etc.
The augmented product benefits – after-sales service, warranty, installation,
delivery and credit.
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D
Price
Pricing is knowing what the customers will be prepared to pay for your product or service.
Price = Cost + Mark-up
Pricing strategy essentially depends on the product’s market positioning. If the business
decides on positioning the product in the high-income segment, the product would be sold at
a high price and vice-versa.
Pricing is affected by other decisions relating to the marketing mix such as Product, Place and
Promotion. However, many businesses position their products on price and then base other
marketing mix decision on the prices that they charge for the product.
To help you decide on the level of pricing of your product or service, get an indication of
market pricing of your competitors and compare with comparative products.
Some businesses have cost leadership where they sell their products or services marginally
lower than their competitors, such as NTUC. A business may price its product at lower price
to encourage trial but this should be avoided as it is always easier to reduce price than push
them back!
There must always be a balance between the pricing strategy, costing and cash flow of a
business. One cannot price the product too low as it may not be enough to cover costs;
whereas one cannot price too high as customers may not equate the value of the product to
the high price. To maximize profits, it is ideal to have a high price and a low cost.
E
Promotion
Promotion is to communicate effectively the necessary information of the product or service
to its customers so as to encourage them to make a purchase.
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The Promotion Mix includes all types such as:






Advertising
Face-to-face (Personal) selling
Exhibition
Telesales
Sales promotion
Sponsorship etc.
An entrepreneur needs to:


Construct the message (what to tell whom).
Choose the medium (how to tell).
The Promotion Mix is targeted at both existing and new customers. You may need to promote
to each group of customers in different ways.
Before deciding on the Promotion Mix, all businesses have to consider customers’ purchase
decision-making process:

How do they make purchase decisions?



What stages do they go through?
At what times?
Who/What influence their decisions?
Based on the information above, then you will decide on the 4W 1H:

What your should say.

When to say it.

Which method(s) of delivering it?

Why is the chosen way the best way?

How to say it.
Focus on important information customers want:

What will it do for me?

Why should I choose it over competitors?

How do I know I can trust you?

What do I have to do?

Where do I go to get it?
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The most important thing an entrepreneur needs to identify is his/her business Unique
Selling Points (USP):

What is so unique about your product/service?

What differentiates your product/service from your competitors?

What will encourage customers to buy from you?
Eg: The Ritz Carlton is well-known for its 6-star superb services and this has always
differentiated them from the rest of the hotels. Despite its high-range pricing, customers are
still going back to them for its excellent services.
Promotional presentation involves style. Style influences customers’ perceptions of product,
which in turn constitutes to “Brand” image. In order to build a brand of a product/service,
the style of promotional activity must reflect the image to be built.
F
Place
Place (Distribution) is a set of interdependent organizations involved in the process of making
a product/service available for use or consumption by the target customers.
It is not just about method of delivering but also where customers will look for your
product/service. For the sales to be successful, your product/service must be at the right
place. Hence, it is very important to have the right distribution channels.
Channels of distribution consist of several parties like wholesalers, agents, factors or other
intermediaries. Each of them performed a role, which collectively increase the efficiency in
distributing the product to the customer. The various intermediaries are:
1)
Agents
2)
Wholesalers
3)
Retailers – convenience stores, supermarkets, hypermarkets, departmental
stores, specialty stores, discount stores etc.
Whichever distribution strategy and location that a business chooses to market its
product/service; it must meet demands fast with acceptable cost.
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Service Marketing Mix – 7 P’s
G
A service is a form of product that consists of activities, benefits or satisfactions offered for
sale that are essentially intangible and do not result in ownership of anything. Services
Marketing is marketing based on relationship and value. It may be used to market a service or
a product.
Marketing a service-base business is different from marketing a product-base business.
There are several major differences, including:
1.
2.
3.
4.
5.
The buyer purchases are intangible.
The service may be based on the reputation of a single person.
It's more difficult to compare the quality of similar services.
The buyer cannot return the service.
Service Marketing mix adds 3 more P's, i.e. People, Process, Physical Evidence.
When one markets a service business, one must keep in mind that reputation, value, delivery
of service and follow-through are keys to a successful venture.
H
People
An essential ingredient to any service provision is the use of appropriate staff and people.
Recruiting the right staff and training them appropriately in the delivery of their service is
essential if the business wants to obtain a form of competitive advantage. Consumers make
judgements and deliver perceptions of the service based on the employees they interact with.
Staff should have the appropriate interpersonal skills, aptitude, and service knowledge to
provide the service that consumers are paying for.
I
Process
Refers to the systems used to assist the business in delivering the service.
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J
Physical Evidence
The element of the service mix which allows the consumers again to make judgements on the
organization or business.
Consumers will make perceptions based on their sight of the service provision which will
have an impact on the business perceptual plan for service.
K
Logo, Trademark & Branding
Logo is a graphic element, symbol or icon of a trademark or brand. A typical logo is
designed to cause immediate recognition by the viewer.
The logo is one aspect of the brand of a company or economic entity, and the shapes, colors,
fonts and images are usually different from others in a similar market. Logos may also be
used to identify organizations or other entities in non-economic contexts.
Trademark is a distinctive sign of some kind which is used by a business to uniquely
identify itself and its products and services to customers, and to distinguish the business and
its products or services from those of other businesses.
Conventionally, a trademark comprises a name, word, phrase, logo, symbol, design, image, or
a combination of these elements. A trademark is a form of Intellectual Property.
Branding comprises all of a company's value-proposition: products, services, people,
advertising, positioning, and culture.
A brand is a collection of images and ideas representing an economic producer; more
specifically, it refers to the concrete symbols such as a name, logo, slogan, and design
scheme.
Brand recognition and other reactions are created by the accumulation of experiences with
the specific product or service, both directly relating to its use, and through the influence of
advertising, design, and media commentary.
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A brand is a symbolic embodiment of all the information connected to a company, product or
service. A brand serves to create associations and expectations among products by a business.
A brand often includes an explicit logo, fonts, color schemes, symbols, which may be
developed to represent implicit values, ideas, and even personality.
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