Marketing

1. 10 Marketing 10-1 Marketing Basics 10-2 Develop Effective Products and Services 10-3 Price and Distribute Products 10-4 Plan Promotion

2. Marketing BasicsMarketing - is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives. • Marketing activities – Marketing is all around you! • Marketing businesses – All businesses must complete some marketing activities even if that is not their focus. Chapter 10

3. MARKETING FUNCTIONS Chapter 10

4. Marketing Functions • Product/Service management – is designing, developing, maintaining, improving, and acquiring products and services that meet consumer needs. • Distribution – involves determining the best ways for customers to locate, obtain, and use the products and services of an organization. • Shipping • Storage Chapter 10

5. Selling – is communicating directly with potential customers to determine and satisfy their needs. Selling can be face to face, such as when a customer visits a business or when a salesperson goes to the home or business of a potential customer. • Marketing-information management – obtaining, managing, and using market information to improve business decision-making and the performance of marketing activities. Chapter 10

6. Financing – is budgeting for marketing activities, obtaining the necessary funds needed for operations, and providing financial assistance to customers so they can purchase the business’ products and services. • Pricing – is setting and communicating the value of products and services. • Fair value for money spending. Chapter 10

7. Promotion – is communicating information about products and services to potential customers. Advertising and other promotional methods are used to encourage consumers to buy. • Examples – television, newspapers, magazines, radio, direct mail, and the Internet. Chapter 10

8. MARKETING STRATEGY Marketing activities often cost 50 percent or more of the selling price of a product or service. • Marketing planning – need to develop strategies • To develop a successful marketing strategy • Identify a target market – is a specific group of consumers that have similarwants and needs. • Create a marketing mix - the blending of four marketing elements – product, place, price, promotion. Chapter 10

9. UNDERSTAND CUSTOMERSEffective marketing begins with customers. • Businesses can develop products for two types of consumers. • Final consumers – persons who buy products and services mostly for their own use. • Business consumers – persons, companies, and organizations that buy products for the operation of a business, for incorporation into other products and services, or for resale to their customers. Chapter 10

10. Consumer decision-making – a specific sequence of steps consumers follow to make a purchase • Begins with a need Chapter 10

11. STEPS IN THE CONSUMER DECISION-MAKING PROCESS 1. Recognize a need. 2. Gather information. 3. Select and evaluate alternatives. 4. Make a purchase decision. 5. Determine the effectiveness of the decision. Chapter 10

12. Understanding Customers • Buying motives – the reasons consumers decide what products and services to purchase. • Emotional buying motives – reasons to purchase based on feelings, beliefs, and attitudes • Examples – protecting family/security system Gifts & cards/Valentines Day – feelings of love and affection. Chapter 10

13. Understanding Customers • Rational Buying Motives – guided by facts and logic • Cost effective car/fuel use and repair • College/costs and reputation Chapter 10

14. Develop Effective Products and Services Finding solutions to problems through carefully designed studies involving consumers is known as marketing research. Chapter 10

15. PLAN MARKETING RESEARCH • Steps in marketing research 1. Define the marketing problem. 2. Study the situation. 3. Develop a data collection procedure. 4. Gather and analyze information. 5. Propose a solution. Chapter 10

16. TYPES OF RESEARCH STUDIES • Surveys – gather info from people using a carefully planned set of questions. • Mail/Internet/Phone • Focus groups – small number of consumers take part in a group discussion. • Discuss experience/react to new ideas/make suggestions • Observations – collect information • How customers choose products/problems with products • Experiments – pepsi/coke Chapter 10

17. PRODUCT PLANNING Each part of the marketing mix is important when you decide to buy a product – this even includes packaging. • Parts of a product • Basic Product – the simplest form of a product – not unique and is usually available from several companies. • Product features – models of cell phones • options • Brand Name – unique identification for a companies products. • Packaging – security, storage • Guarantee or warranty Chapter 10

18. PRODUCT PLANNING • Product planning procedures • Idea development – generating new product ideas is a creative process • Idea screening • Strategy development • Production and financial planning • Limited production and test marketing • Full-scale production Chapter 10

19. SERVICES – are activities that are consumed at the same time they are produced. • Intangible – no physical form • Inseparable – consumed at the same time they are produced • Perishable – the availability of a service must match the demand for that service at a specific time. • Heterogeneous – differences in the type and quality of service provided. Chapter 10

20. Price and Distribute Products • Buyers usually want to pay the lowest price possible. • Sellers want to charge the highest price possible. Chapter 10

21. PRICING FACTORS • Supply and demand • Uniqueness • Age – product new on market $ • Season • Complexity – highly complex and technical products have higher prices than simple products. Products with many features and options will also command higher prices. • Convenience Chapter 10

22. Selling price Product costs Operating expenses Profit Gross margin PRICE A PRODUCT Chapter 10

23. PRICE A PRODUCT • Markup – the amount added to the cost of a product to set the selling price. The markup is equal to the expected gross margin. • Markdown – reduction in selling price. Chapter 10

24. CHANNELS OF DISTRIBUTION • Need for distribution channels • Differences in quantity • Differences in assortment – businesses usually specialize in producing a specific type of product, while consumers want to purchase a variety of products. • Differences in location • Differences in timing Chapter 10

25. CHANNELS OF DISTRIBUTION • Channels and channel members • Direct channel of distribution – products move from the producer straight to the consumer with no other organizations participating. • Indirect channel of distribution – includes one or more other businesses between the producer and consumer. These other businesses provide one or more of the marketing functions. Chapter 10

26. COMMUNICATION • The communication process • Communicating through promotion • Promotion is any form of communication used to inform, persuade, or remind. Businesses, organizations, groups, or individuals use promotion. Chapter 10

27. COMPONENTS OF EFFECTIVE COMMUNICATION Chapter 10

28. PROMOTION • Personalized promotion – communicated directly with each customer using information tailored to that person. • Mass promotion – communicated with many people at the same time with a common message. • Mass personalization Chapter 10

29. Promotion • The most well known type of personalized promotion is personal selling. • Personal selling – is direct, individualized communication with prospective customers to assess their needs and assist them in satisfying those needs with appropriate products and services. Chapter 10

30. Promotion • Personal Selling • Gather information for sale • Product information • Meet with Customer • Ask Questions • Provides Information • Demonstrate Product for Customer • Helps the Customer make decision to purchase • Arrange payment or financing • After sale – follow-up Chapter 10

31. Promotion • Advertising – is any paid form of communication through mass media directed at identified consumers to provide information and influence their actions. • Television, Radio, Newspapers • Magazines, Mass Mailings, Outside Displays • Internet • Specialty Advertising Chapter 10

32. Promotion • Publicity – is non-paid promotional communication presented by the media rather than by the business or organization that is being promoted. • Public relations – ongoing program of non-paid and paid communications – favorably influence public opinion about an organization, marketing effort, idea, or issue Chapter 10

33. Promotion • Sales promotion – includes activities and materials designed to reinforce a company’s brand or image. • Contests • Games Mass Personalization – Using the Internet sees advertisement – encouraged to complete on-line survey. Chapter 10