MODULE

LESSON 3

MARKETING MIX : THE 4PS OF MARKETING

OVERVIEW

Marketing is simplistically defined as ‘putting the right product in the right place, at the
right price, at the right time.’ Though this sounds like an easy enough proposition, a lot of hard
work and research needs to go into setting this simple definition up. And if even one element is
off the mark, a promising product or service can fail completely and end up costing the company
substantially.

The use of a marketing mix is an excellent way to help ensure that ‘putting the right product
in the right place will happen. The marketing mix is a crucial tool to help understand what the
product or service can offer and how to plan for a successful product offering. The marketing mix
is most commonly executed through the 4 P’s of Marketing: Price, Product, Promotion,
and Place.

MODULE OBJECTIVES

At the end of the module , the students are expected to :

 understand the marketing mix or the 4P’s of marketing
 Learn how to design appropriate marketing mix for a particular target market
 Understand the different marketing program that companies formulate and apply for their
products
 understand the importance of product value that would satisfy the needs of the customers
 Learn the matching of correctly defined marketing problems with the proper marketing
solutions .
 Learn and understand about the contents of a marketing plan

COURSE MATERIALS

3.0 MARKETING MIX

– is the set of controllable and interrelated variables that a company assembles to satisfy
a target group better than its competitor.
Markets are likely to be segmented for efficient and effective marketing management and
pricing , promotion , and distribution strategies.
Target market – is a well defined set of customers whose needs the company plans to satisfy.
( Kotler ).

The 4 Ps :
1. Product – anything marketed to satisfy consumer wants or needs . It may be a person,
a place, an organization , an idea or a good . “Remember : A great package with a lousy
product never wins long term”.

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2. Place ( Distribution ) – its function is to make the product conveniently available to the
target market consistent with their purchasing patterns .

3. Promotions – includes advertising , personal selling , public relations , and sales

promotion . Its function is to build and improve consumer demands .
The promotion Mix :
a. Advertising – to effectively inform and persuade the target market.
b. Public relations – to offer a positive image of the company and the brand .
c. Selling – to get the customers to buy .
d. Sales Promotion – to convince the customers to buy immediately.

4. Price – to make the product affordable to the target market and reflect the value of
benefits provided . In setting price , factors like competition, existing practices, on
markups, discounts and terms of sales, product appeal and legal restrictions must be
considered.

THE TOTAL MARKET APPROACH – designing a single marketing mix and directing it
at an entire market for a particular product .

Product
Organization Target
Promotion
Market
Price
Place
Exhibit 1 . Single marketing Mix

Strategic Ps Product and Placement They cannot be changed overnight .

Tactical Ps Price and Promotion They can be changed more easily ,
Exhibit 2. Strategic Ps and tactical Ps of marketing Mix

3.1 THE BUYING DECISION MAKING PROCESS

The interacting 4Ps attempt to influence the buying decision making process of customers
at a level that maximizes profit.

Company’s 4Ps competitor’s 4Ps Competitor’s background

Experience

Target market purchase or

No purchase Decision Making

Exhibit 3– Factors influencing customer’s purchase decision-making

The overall marketing mix of the firm must show superiority over competition if the
company intends to gain market shares, although all components of marketing mix need not
be superior to the competition

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3.2 BUYER BEHAVIOR

An important component of the purchase decision-making process as defined in Exhibit
1 , is the consumer background .

Factors influencing buyer behavior in consumer markets provides additional input before
assembling a marketing program must be considered
1. Cultural factors –are the most basic purchasing driver of a consumer . Culture ia s se
of values and way of life which greatly influence attitudes and behaviors as well as
preferences of a specific group of people.
2. Social factors –involve peer or reference groups, one’s role or status as well as family
that influence a person’s decision making process in the context of the people around
him and how who is in that group. This includes opinion leaders whose expertise might
be sought for advice.
3. Personal factors- include many individual points such as lifestyle , economic situation,
occupation , age , activities and interests that would dictate one’s buying behavior.
4. Psychological factors – include perception, motivation, learning , beliefs, and attitudes.
How consumers relate to a brand depends on wat is meaningful, necessary and
interesting to them .

3.3 ASSEMBLING THE MARKETING MIX

Before marketing mix program is formed , there must be first be an analysis and
definition and target customers.
1. In the Macro level , market segmentation answers the questions “ What are the groupings
of similar customers?”
2. In the Micro level,
a. Decision making Unit ( DMU ) points to “ Who purchase the product ?.”
b. Decision making process (DMP) answers the questions , “How, where , and when is the
purchase made ?.”
c. Consumer motivation and preferences guide the marketer to answer” What do the
consumers want and buy?”
 In satisfying customers, marketers must not assume who the decision maker is or the
mistake maybe costly for the firm.
 The marketers must consider the more DMU’s that are usually involved in the decision
making process ( DMP) for most products and services .
 Marketers must therefore consider the initiator, influencer, decider, byer, user and the
beneficiary for every purchase – not just the user .

3.4 PRODUCT VALUE

 Product value must be in synchronous with what consumers need, therefore it must be
able to close the gap between what the customers have at the moment and what they
really need .
 Products may be either superior, at par with (the same ), or basic to those of
competition. Superior product satisfies more needs and wants of customers while a
basic product satisfies minimum requirements .Parity products satisfy the same
customers needs in the same way as competitors.
 Product quality must conform with customer’s specifications
 Price must be defined after the product quality is identified to ensure an appropriate
product value .

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3.5 MARKETING PROGRAM

After the product value is formulated and found acceptable to the target customers ,
marketing program are then assembled by identifying which of the marketing mix components
should logically be the main weapon and which would be the support strategy.

a. Distribution –driven
Some companies are distribution –driven , meaning their product must be available
when and where customers expect them to be. Their locations are the single most
important factor in their business
Ex, Andoks, Baliwag, ( small stalls spread over several locations) Caltex, Petron
( strategic locations )

b. Selling-driven
Products are available through the salesmen.
Ex. Avon , Natasha, Amway , Usana , life insurance companies

c. Sales Promo-driven

Regularly or continuously offer marketing activities to achieve short term objectives such
to increase volume or long term objectives like brand building .
Example : Mc Donald’s – which has about eight major promo campaigns yearly
to bring consumers back to the stores as often as possible

Ex.Mc Donald’s : Advertising ( media sand outdoor)

Sales promotion Distribution ( retail channels )

Pricing

d. Price–driven

Offer low prices to attract the most number of price –conscious customers
Example : Pure Gold- boasts of rock bottom prices everyday attracting customers

Ex Pure gold
Advertising ( Print )

Price Consumer promotions

Distribution

e. Advertising –driven
Some companies continuously pay for time and space whether in TV, on print, outdoor ,
online and other efforts to achieve and /or maintain their desired awareness.
Ex.Coke Distribution
Advertising Consumer promotion

Pricing

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3.6 DIAGNOSTIC MARKETING MIX

It involves the matching of correctly defined marketing problems with the proper
marketing solutions .

Marketing Problem Marketing Solution

Low awareness level Advertising
Low availability Placement
Low trial rate Pricing and /or promotion
Low repeat purchase Product and / or service quality

 The marketing solutions above are actually the 4Ps of marketing or marketing mix ,
which are all interrelated .
 A low product availability level for instance, may be caused by low demand and
consequently low distribution or placement which advertising can stimulate .
 Increased levels of advertising will not only create awareness but will induce
customers to inquire about the availability of a brand or product.

3.7 COMPETITIVE ADVANTAGE

Competitive advantage s secured by providing better or best value in the perception of the
customer , relative to all your competitors. A company’s capabilities can become a true
competitive advantage if the following criteria are met :
 It is valuable in the marketplace .
 It is superior in the market place
 It is difficult to match
 It is difficult to substitute
 It is difficult to trade and gain (as in hiring R &D executives from another company)

Competitive advantage is not easy to attain and even harder to maintain .Prof.
George Day (1991) defined three trends why competitive advantage might be
aggravated:
 Accelerated changes in the complexity of markets;
 Exponential growth in the volume of market data ;
 The imperative need for shared organizational assumptions about the market to
assure the coherency and timeliness of strategies that anticipate rather then react
to the market .

3.8 MARKETING PLAN

The marketing mix is actually the heart of an important company document called the
marketing plan, which outlines how the company intends to grow in the marketplace and win
against competition. The marketing is usually formulated annually , but results are reviewed
monthly with major business reviews done quarterly .

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1. Executive summary 5. Marketing Strategy

2. Business Review 5.1 Product Positioning
3. Situational Analysis 5.2 Customer satisfaction strategy
3.1 Environmental Analysis 5.3 Preferred brand strategy
3.2 Key factors for success 5.4 Contingency plan
3.3 Strength and weaknesses
analysis 6. Marketing Budget
3.4 Opportunities and threats 7. Marketing Implementation guide
analysis 8. Appendix
3.5 Market segmentation
4. Marketing Objectives and goals

Exhibit 4- Typical Format of a Marketing Plan

4’s in Marketing Planning

a. Sufficiency – the marketing mix must be able to adequately meet the defined
marketing objectives. This means ambitious growth objectives would naturally
need the corresponding heavier investment in marketing support programs.
b. Selectivity – the marketer must be able to consider all potential alternatives of
each marketing mix before short listing all possible combinations of the marketing
mix that can meet their marketing objectives . The one that can provide the best
profitability is the one logically to be chosen,
c. Synchronicity – when the marketing mix is selected , the different elements must
combine harmoniously for the brand to become successful. For example, a
marketer cannot choose to invest in heavy advertising of low quality product at
high price.
d. Sustainability- the marketing mix that s finally chosen must be able to last in the
long term vis-a vis competition . Fr instance, a lower price strategy not only risks a
price war but is not sustainable unless the form is the cost leader in the industry .

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ACTIVITIES/ASSESSMENTS:

Exercises:

Test I. MULTIPLE CHOICE .Select and write the letter that corresponds to your
answer.
1. Developing a marketing strategy involves designing a marketing mix and selecting
a. The objectives of the marketing department b. the goals of an organization
c. the target market d. the marketing concept

2. The underlying purpose in designing a marketing mix is to

a. Guide the selection of the appropriate market
b. enable an organization to use its resources to meet its goals
c. provide a complete plan for taking all a firm’s products to market
d. satisfy the needs of the target market in order to bring about exchanges .

3. All of the following decisions could be part of a firm’s marketing mix except
a. How to package a product b. what price to charge
C. How to create a product efficiently d. which stores should serve as
merchandising outlet.

4 . This marketing mix is to build and improve consumer demand,

a. product b. placement c. price d. promotions

5 .Low trial rate is a marketing problem that can be solved through :

A. advertising b. pricing and/or promotions c. placement d. product / service quality

6. These are considered as the Tactical Ps of marketing mix .

a. Product and placement b. Product and Price
c. Promotions and price d. Promotions and placement

Test II. Enumerate the following :

1. 4 factors influencing buyer behavior in consumer markets.
2. 4 Ps of Marketing
3. 4’s in Marketing planning
4. Tactical Ps of Marketing mix
5. Criteria to achieve competitive advantage
6. Four Promotion Mix

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CASELET .

gohotels.ph, a property of Robinson’s Land, began test marketing its value hotel in May
2010 at its building along Edsa beside Robinson Pioneer Street. It has about 200 rooms in the
Edsa site but has chosen to have 60 to 100 rooms in each of the subsequent sites in the provincial
areas. Its pricing is unique because it utilizes the revenue management model of the airline
industry where prices would vary depending on demand , in this case, occupancy numbers. Thus,
a 16 to 22 square meter room can command a price as low as P388 plus added tax (VAT) , or as
high as P3,000 plus VAT, averaging about P1,550 plus VAT per room per night booked via
internet . While the prices are low the room boasts of comfortable bed with two types of pillow(
hypoallergenic and chiropractic), a clean private bathroom with rain shower , free with LCD TV ,
a convenient location with safe surroundings secured by CCTV and safety cabinet .

On its first month of its test market and despite using mostly viral marketing and press
write ups to create awareness, its experience an occupancy rate higher than most hotels- 60 to
80% on most days with two of those days fully booked , thus creating an innovative business
model in the hotel industry with the new basis of competition.

Questions :
A. Who would be the target market attracted to the offer of gohotels.ph?
B. Identify the marketing mix of go hotels.ph and compare it with other value hotels. What
are their strengths ad weaknesses?
C. How could gohotels.ph offer an amazingly low price as low as P388 plus VAT per rom
night ?

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