PRINCIPLES OF MARKETING

Chapter 4: Developing the Marketing Mix

For K-to-12 use only. Sheila G. Vega. WVSU-CBM

 Objectives
Define a product and differentiates the product,
services, and experiences.
Identify and describe the factors to consider when
setting prices and new product pricing and its
general pricing approaches.
Discuss the structure of distribution channels, its
functions, and the nature of supply chain
management.
Define and identify relevant promotional tools,
namely, advertising, sales promotion, personal
selling, public relations, and direct marketing to
create awareness and persuade the target market
 Product & Service
Product
- is anything that can be offered in a market for
attention, acquisition, use, or consumption that
might satisfy a need or want.
Service
-is a product that consists of activities, benefits or
satisfaction that is essentially intangible and
does not result in the ownership of anything.
For K-to-12 use only. Sheila G. Vega. WVSU-CBM
 Experience

represent what buying the product or

service will do for the customer.

For K-to-12 use only. Sheila G. Vega. WVSU-CBM

Product & service classification

Consumer
products
Business
products
For K-to-12 use only. Sheila G. Vega. WVSU-CBM
Marketing Considerations for Consumer
Products

For K-to-12 use only. Sheila G. Vega. WVSU-CBM

Industrial Products
-products purchased for further processing or for
use in conducting a business
Classified by the purpose for which the
product is purchased
Materials and parts
Capital
Raw materials

For K-to-12 use only. Sheila G. Vega. WVSU-CBM

Industrial Products
Capital items are industrial products that
aid in the buyer’s production or
operations.
Materials and parts include raw materials
and manufactured materials and parts
usually sold directly to industrial users.
Supplies and services include operating
supplies, repair and maintenance items,
and business services.
For K-to-12 use only. Sheila G. Vega. WVSU-CBM
For K-to-12 use only. Sheila G. Vega. WVSU-CBM
Price
-is the amount of money charged for a
product or service or the sum of the values
that consumers exchange for the benefits of
having or using the product or service.
- is the only element in the marketing mix
that produces revenue; all other elements
represent costs
For K-to-12 use only. Sheila G. Vega. WVSU-CBM
Considerations in Setting Price

For K-to-12 use only. Sheila G. Vega. WVSU-CBM

Customer Value- based
Pricing
Value-based pricing uses the buyers’
perceptions of value, not the sellers
cost, as the key to pricing. Price is
considered before the marketing
program is set.
 Value-based pricing is customer driven
 Cost-based pricing is product driven
For K-to-12 use only. Sheila G. Vega. WVSU-CBM
Cost-based Pricing
setting prices based on the costs for
producing, distributing, and selling
the product plus a fair rate of return
for effort and risk.
adds a standard markup to the cost
of the product

For K-to-12 use only. Sheila G. Vega. WVSU-CBM

 NEW-PRODUCT PRICING STRATEGIES
• Market-skimming pricing
• A strategy with high initial prices to “skim”
revenue layers from the market.

• Market-penetration pricing
• Sets a low initial price in order to penetrate
the market quickly and deeply to attract a
large number of buyers quickly to gain market
share.
For K-to-12 use only. Sheila G. Vega. WVSU-CBM
 Place: Distribution Design

• Distribution objectives
• To effectively reach your target market;
• To minimize costs of dissemination; and
• To maintain consistency

For K-to-12 use only. Sheila G. Vega. WVSU-CBM

 Place: Distribution Design

• Distribution channels
• Are the set of interdependent
organizations that are involved in the
process of making a product or service
available for use or for consumption by
the consumer.

For K-to-12 use only. Sheila G. Vega. WVSU-CBM

Nature and Importance of Marketing
Channels

Intermediaries offer producers greater

efficiency in making goods available to
target markets. Through their contacts,
experience, specialization, and scale of
operations, intermediaries usually offer the
firm more than it can achieve on its own.
For K-to-12 use only. Sheila G. Vega. WVSU-CBM
Nature and Importance of
Channels Marketing

For K-to-12 use only. Sheila G. Vega. WVSU-CBM

Nature and Importance of
Channels Marketing

For K-to-12 use only. Sheila G. Vega. WVSU-CBM

Supply chain management

For K-to-12 use only. Sheila G. Vega. WVSU-CBM

 Integrated Supply Chain
Management
-is the logistics concept that emphasizes
teamwork, both inside the company and
among all the marketing channel organizations,
to maximize the performance of the entire
distribution system.

For K-to-12 use only. Sheila G. Vega. WVSU-CBM

 Exercise

1. Take a product or service of your choice

and trace and draw a diagram of the
channel of distribution that is used to bring
the product or service to the marketplace.

For K-to-12 use only. Sheila G. Vega. WVSU-CBM

 Retailing

Retailing includes all the activities

in selling products or services
directly to final consumers for
their personal, non-business use.
Retailers are businesses whose
sales come primarily from
retailing.
For K-to-12 use only. Sheila G. Vega. WVSU-CBM
Promotion Decision

Personal Sales
Advertising
selling promotion

Public Direct
relations marketing
For K-to-12 use only. Sheila G. Vega. WVSU-CBM
Promotional mix

Advertising
- consists of activities undertaken to
create, maintain, or change
attitudes and behavior of target
consumers toward an organization.

For K-to-12 use only. Sheila G. Vega. WVSU-CBM

Promotional mix

Sales Promotion
- Are short-term incentives to
encourage the purchase or sale of a
product or service.

For K-to-12 use only. Sheila G. Vega. WVSU-CBM

 Promotional mix
Public Relations
- Is building good relations with the
company’s various publics by obtaining
favorable publicity, building up a good
“corporate image,” and handling or
heading off unfavorable rumors, stories,
and events.
For K-to-12 use only. Sheila G. Vega. WVSU-CBM
 Promotional mix
Personal Selling
- Is personal presentation by the firm’s sales
force for the purpose of making sales
and building relationships.

For K-to-12 use only. Sheila G. Vega. WVSU-CBM

 Promotional mix
Direct Marketing
- Direct communication with carefully
targeted individual consumers to obtain
an immediate response through use of
mail, telephone, e-mail, and other
nonpersonal tools to communicate
directly with specific consumers.
For K-to-12 use only. Sheila G. Vega. WVSU-CBM
Organizations, Persons, Places, and
Ideas
Organization marketing
- consists of activities undertaken to
create, maintain, or change
attitudes and behavior of target
consumers toward an organization.

For K-to-12 use only. Sheila G. Vega. WVSU-CBM

 Organizations, Persons, Places, and
Ideas
Person marketing
- consists of activities
undertaken to create,
maintain, or change
attitudes and behavior
of target consumers
toward particular people
For K-to-12 use only. Sheila G. Vega. WVSU-CBM
 Organizations, Persons, Places, and
Ideas
Place marketing
- consists of activities undertaken to create,
maintain, or change attitudes and behavior
of target consumers toward particular places

For K-to-12 use only. Sheila G. Vega. WVSU-CBM

 Organizations, Persons, Places, and
Ideas
Social marketing
- is the use of commercial marketing concepts
and tools in programs designed to influence
individuals’ behavior to improve their well-
being and that of society.

For K-to-12 use only. Sheila G. Vega. WVSU-CBM

The End