MARKETING PLAN

MARKETING PLAN
The marketing plan details how the proposed business will
sell its product to the target consumers. It may consist of
some or all of the following important sections:
1. Product
2. Place
3. Price
4. Promotion
5. People
6. Packaging
7. Positioning
 MARKETING MIX
• Refers to a mode, means, or tool used by the entrepreneur to
position the product in the target market segment to efficiently
and effectively deliver it to the consumers and to convince them
about the benefits that they will derive from buying the product.

• The marketing mix is also known as the “Ps” in marketing.

• Originally, there were only 4Ps, but the model has been
continuously modified until there became 7Ps. The original 4Ps
stand for product, place, price, and promotion. Eventually, three
elements have been added namely, people, packaging, and
positioning to comprise the 7Ps.
 The marketing mix basically addresses the
following questions:

1. How can the target consumers be influenced

to buy the product or service?
2. What marketing strategy must be adopted to
convince the consumers that the product or
service being offered satisfies their needs?
 Product Place

Price
Positioning Consumer – driven
Strategy

Packaging People Promotion

 PRODUCT
• Refers to the tangible good or intangible service
offered by the business to the target consumers.
• For emphasis, the two basic entrepreneurial
tenets relative to product are as follows:
1. The product is only produced once there is an
existing need or want.
2. The product must satisfy the need or want
better than the competing products.
• The product therefore is the nucleus of the
marketing mix. Once the product fails to satisfy
the needs and wants of the consumers, the other
P’s may no longer be considered essential in the
buying decision.
• In order to improve the marketing performance of
the primary product, big businesses nowadays
adopt the concept of product mix where they
make different products or services available to
the consumers on top of the primary product. This
product strategy is called differential startegy.
 PLACE
• Refers to the place where the target consumers
are. The entrepreneur must establish his/her
business or product in the most strategic place
or location. The term strategic place, however
is relative.
• The basic entrepreneurial concept relative to
place in the marketing mix is very simple and
straightforward, that is, put your business were
your consumers are willing to buy the product.
 PRICE
• The concept of pricing relative to the marketing mix can be viewed from two
opposing perspectives, namely, the perspective of the entrepreneur who produces
the product and the opposing perspective of the consumers who ultimately but the
product. Normally producers apply higher prices for the products to gain a higher
profit, while the consumers want lower prices for the products.

• There are no rigid rules as to how prices are set, there are some variables that highly
influence the setting of prices of goods and services. These include the following:
1. Availability the competing products
2. Cost of making the product
3. Type of product
4. Presence of substitute products
5. Stages of the product in the market
6. Demographic profile of the target consumers
Availability of the Competing Products

• When the supply of the competing products is

high, the price of the product is usually low.
Producers tend to gradually pull down the
prices when the supply is high, and adopt a
reverse mechanism when the supply is low.
As an entrepreneur you must know then the
level of supply and demand for the product.
 Cost of Making the Product
• In manufacturing the product, cost is involved. The term cost refers to
the amount spent by the manufacturer in view of the expected future
benefits. The manufacturing cost includes the direct materials, direct
labor and factory overhead. The basic rule is that the entrepreneur
should not set a price lower than the cost involved in making the
product.

• Direct labor – refers to the wages paid to the workers who are directly
involved in manufacturing the product.
• Factory overhead – includes indirect materials and labor and other
expenses like the cost of light, water, fuel or machinery maintenance.
• Direct materials - pertain to the materials that form part of the
finished product.
 Type of Product
• INDUSTRIAL PRODUCTS - are used as raw
materials to other manufacturing entities.
These products usually have higher prices
compared to consumer products.
• CONSUMER PRODUCTS - are used and
consumed by individual consumers. These
products may be further classified into
convenience product, shopping product, and
highly-priced product.
 Presence of Substitute Products
• The presence of substitute products is a threat
to the primary product. Substitute products
basically set the limit to the selling price of the
primary product. The consumers can easily
switch and buy the substitute products with
lower prices especially when the primary
product is not available.
 Stages of the Product in the Market

The product usually undergoes the following

stages:
1. Introductory stage
2. Growth stage
3. Maturity stage
4. Decline stage
• The pricing model that may be adopted during the introductory stage is entirely
different when the product has already maturity stage. For example, during the
introductory stage, the entrepreneur may adopt the price skimming approach
in which the new product is highly priced when introduced in the market, but is
gradually reduced as competitors increase. The entrepreneur may also adopt
the price penetration approach in order to build a well-founded consumer base.
In this approach, the product is introduced with a low price.

• In the growth and maturity stages, the entrepreneur may adopt the commonly
used pricing strategy which is the cost-based model, in which the price is simply
equal to the cost plus the desired profit margin. The desired profit margin must
be suffiecient enough to cover operating expenses like salaries of office
employees, traveling expenses, taxes and licenses, and other types of business
expenses that are normally charged to operations.

• In the decline stage, the product experiences a decreased or negative growth in

sales. This leads to lower profits or eventual losses for the business, and
ultimately the discontinuance of production and distribution of the product.
Demographic Profile of the Target Consumers

• Since the final buyers are the consumers, their

demographic profile highly influences the
process of setting the most appropriate prices
of the goods or services.
• The pricing strategies most often used by
retail businesses include psychological pricing
and discount pricing.
Psychological pricing is categorized as follows:
1. Promotional pricing - where products are sold at a lower price in a
limited temporary period like midnight sale, Christmas sale or
anniversary sale.
2. Odd or even pricing - where products sold at prices that end in odd
number 5 like P99.95, P199.95 or P399.95 appear cheaper
compared to products with prices that end in even number 0 like
P100 , P200 or P400.
3. Prestige pricing - where products are purposely sold at a higher
price in order to create high or superior image like a skin lotion sold
at P700 whereas other similar products are sold between P150 and
P200.

The entrepreneur may resort to discount pricing to keep up with the

competition in the market, recreate interest in the product, and get
rid of the old stock.
 PROMOTION
• Refers to the mode of conveying the presence and
attributes of the product to the target consumers. It
creates an awareness of the product in the minds of
consumers and elicits their desire to but it.
• Promotion utilizes the most appropriate media to reach
the consumers. These are the following:
– Advertising
– Publicity
– Personal selling
– Sales promotion
– Direct Marketing
 Advertising
• The most common medium of promoting a product or service is through advertising in
the following forms.
– Television or radio commercials
– Print advertisements like those on billboards, magazines, telephone directories, or newspapers
– Online advertising
– Packaging ads

• The most important element in advertising is the message that must be conveyed to
the consumers. Advertising must be able to do the following:
1. Attract the attention of consumers
2. Communicate the message of the product
3. Elicit the feeling or desire to buy the product
4. Identify the benefits of the product
5. Convey the message using plan and simple language
6. Appeal to consumers’ understanding by being meaningful and believable
7. Distinguish the product from the other similar products
 Publicity
• Publicity is another way of promoting the product or
service to the target consumers through media coverage.
Members of media are usually informed through a formal
statement or press release about a particular event where
the product or service will be presented or endorsed by
some well-known personalities.

• Self-promotion is another approach to handling publicity

where goods like pens, T-shirts, mugs, and the like with the
business name and logo printed on them are distributed to
the target consumers for free.
 Personal Selling
• Personal selling involves a salesperson who
has personal and direct contact with the
prospective consumers. This approach may
not cover consumers who have not visited the
business establishment or have not been
approached by the sales force.
 Sales Promotion
• Sales promotion aims to influence the target consumers to buy the product or avail of the
service now and not tomorrow. This strategy involves giving incentives to consumers so
they will acquire the product or service. The most popular promotional tools adopted in
sales promotion category are discounts, coupons, cash rewards and gift certificates.

Discounts - allow the consumers to buy the product or avail of the service at a price
lower than the regular selling price.

Coupons – are a form of incentive to the customers for patronizing a store.

Cash rewards - a means of promoting the product helps the business in gaining the
loyalty of the customers.

Gift certificates - are an incentive to the customers who have completed the required
accumulated amount of purchases.
 Direct Marketing
• Promoting a product or service through direct
marketing is undertaken through the Internet.
The entrepreneur starts by building a
consumer database, performs a one-on-one
approach in building consumer relationship
and sells the product online.
 PEOPLE
• Refers to individual employees or workers who
are directly involved in the production,
marketing, and sale of the product or service.
Hence, the entrepreneur must be sure to hire
the right person for the position.
 PACKAGING
• Refers to the process of putting the product in a
package or container.

• The packaging of a product must be user-friendly,

that is must be easy to open, handle, and store. It
can be resealable and reusable. It can also be
environment-friendly. The label printed on the
packaging material must be attractive, readable, and
complete with the necessary product information.
 POSITIONING
• Refers to the place occupied by the product in
the minds of the consumers. It is a marketing
strategy that defines the target consumers.
 Integrated Marketing Mix

• The different categories or Ps of the marketing mix are not

usually applied separately or independently in positioning
the product or service in the minds of the consumers.
Rather, the different elements of the marketing mix blend
harmoniously in order to influence the demands of the
target consumers. Since the four or seven Ps are
considered marketer or seller- oriented, these must be
converted to become consumer-oriented.
• This mixture of different Ps to position the product in the
market is technically called integrated marketing mix.
• Based on the customer-oriented perspective,
the seven Ps may be represented in a
customer-driven strategy as follows:
1. Customer satisfaction for product
2. Customer convenience for place
3. Customer cost lowered
4. Customer information for promotion
5. Customer quality assurance for people
6. Customer safety for packaging
7. Customer decision for positioning