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Marketing CH. 4 Notes. The Basics of Marketing. Marketing today is different from marketing only a few years ago It has expanded from a few activities to a variety The earliest use of marketing was to move products from the producer to the consumer

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the basics of marketing
The Basics of Marketing
  • Marketing today is different from marketing only a few years ago
  • It has expanded from a few activities to a variety
  • The earliest use of marketing was to move products from the producer to the consumer
  • Then promotion and sales were added to help persuade customers to buy
  • Today, businesses are able to complete a vast # of marketing activities ranging from research to customer credit
from independence to integrated
From Independence to Integrated
  • Has changed from an activity that was an independent part of business to one that is well integrated with other business functions
  • In the past, marketing was not well understood so they would often work by themselves
  • Now, it is integrated- meaning it is an essential part of the business
  • It is involved in all important business decisions, and strategies are developed as a part of the business plan
from problems to opportunities
From Problems to Opportunities
  • Marketing used to be handled as a problem-solving tool, now it is a creation tool
  • Also, it is often called on when companies face problems
  • Today’s businesses can’t afford to wait until problems occur, so they are continuously looking for market opportunities
  • Ways to improve a companies offerings in current markets
  • It is responsible for identifying and planning opportunities
putting marketing up front
Putting Marketing Up Front
  • Successful businesses use carefully prepared
  • plans to guide their operations
  • The business will use a strategy for how it expects
  • to achieve its goals
  • To develop this strategy businesses should use the
  • marketing concept
  • By incorporating the marketing concept
  • companies attempt to develop products
  • and services that respond to customers’ needs rather
  • thanwhat the company thinks should be offered.
  • Marketing will be directed at meeting the identified
  • needs of the customers rather than developing ways
  • to persuade people to buy something they may not
  • need.

Understanding the customer

  • Customers have many choices of products
  • They often spend time comparing products and services before making decisions
  • Bringing a new product to the market is expensive, it take time and money to develop, produce, distribute, and promote
  • When it enters the market it must compete with other companies
    • This competition among products is very intense

Identifying customer needs

  • Successful companies are usually those that meet customer needs
  • But, meeting customer needs is not easy
  • Many customers are not sure of their needs, or have conflicting needs
  • Customers have many needs, they typically have limited amounts of money available
  • Needs of individuals and groups can be different
  • Businesses tend to deal with customers in two ways
  • Some businesses don’t view the specific needs of customers as important. They believe if they can effectively produce and market products customer will buy
  • Understanding customers is an important part of business activities

Satisfying Customer Needs

  • Businesses study markets to identify groups of consumers with unsatisfied needs
  • Through extensive marketing research, the business gather and analyzes consumer information
  • It categorizes customers according to similar characteristics, needs, and purchasing behavior
  • Groups of similar markets are known as market segments
  • After distinct market segments have been identified, a business will analyze each of them
  • It tries to determine which market segments can be served most effectively and which have the strongest need, the most resources, and the least competition
  • Once segments have been identified and prioritized, the business selects those segments on which it will focus its efforts

Consumers Decision Making

  • Consumers make decision every day
  • Decision is a choice among alternatives
    • Made to satisfy a need or to solve a problem
  • Consumers want to choose the alternatives that provide us the most satisfaction or the greatest value
  • If marketers want to satisfy customer needs, they must understand how consumers choose what they will buy
  • Different theories are made, but there is a general agreement that people follow a series of decision making when purchasing
  • These decisions become routine and simple when repeated

Stages of a Decision

  • Step 1.Recognize- Begins when a consumer recognizes that a need exists
  • If the need is urgent the process is quick
  • If not, then the consumer may take time before buying
  • Step 2. Identify- When the consumer becomes interested in finding a solution
  • Identifying products or services that relate to the need
  • Step 3. Evaluate- When the consumer gathers information and uses it to evaluate choices
  • An evaluation is done to see if any choice is better, more available, or more affordable
  • Step 4. Decide- When the consumer is comfortable with the evaluation, a decision is made
  • Decision will be to select one of the available choices, to gather more information, or to do nothing
  • Step 5.Assess- When the consumer determines whether or not the choice was correct
  • Evaluated to see if it satisfied the need
  • If it did the decision will likely be repeated the next time

Relying on Information

  • Marketers are creative. Creativity is needed to plan the marketing mix, develop new product features and uses, and prepare promotional materials and activities
  • Conducting research is an important marketing activity
  • Need to be skilled in organizing research and using results
  • Most important part of research is the study of potential and current customers
  • Additionally, the research about competitors will identify the type of competition and strengths and weaknesses of competing companies

Responding to Competition

  • 1. Intense Competition
  • Most difficulty type of competition businesses face is market in which businesses compete with others offering very similar products
  • Ex- Pure competition…many business offering the same product (Agricultural)
  • Limited Competition
  • Some businesses have the advantage of having little or no direct competition
  • Ex- Known as a monopoly
  • Monopolistic Competition
  • Most business face competition somewhere between intense and monopoly
  • They have many competitors, but customers see differences among choices
  • The customers determine which product fits there wants and needs

Producers and Manufacturers

  • They develop the products and services needed by other businesses and consumers
  • Because of that role, the product part element of the marketing mix receives the most attention’
  • Distribution is also important to insure the product gets to the customers
  • Unless manufacturers and producers distribute products directly to the users, they must rely on other businesses to make good decisions about product distribution, prices, and promotion
  • Even if producers and manufacturers do not sell directly to final consumers, they still must understand and respond to customers needs

Channel Members

  • A channel of distribution is made up of all the businesses involved in completing marketing activities as products move from the producer to the consumer
  • Channel Members- are the businesses used to provide many of the marketing functions during the distribution process.
  • If the product does not meet the customers needs, the customers are likely to hold the channel member as responsible as the producer
  • After decisions are made about what products to offer, channel members then focus their attention on the other mix elements
  • Retailers are responsible for most final pricing decisions
  • They use promotion activities to encourage consumers to purchase their products

Service Businesses

  • Most service businesses work directly with customers rather than through a channel of distribution
  • Therefore they are responsible for the entire marketing mix
  • Product mix element is very important- they must develop procedures to insure quality service every time
  • Distribution is also important- because the service must be available where and when the customer wants it
  • Service businesses have more control over pricing
  • It is more difficult for customer to determine the appropriate price
  • Marketing by Non-Business organizations
  • It is not unusual today to see marketing used by museums, libraries, symphonies, athletic teams, churches, and clubs
  • Nonprofit organizations
  • Do not operate off of profit motive, however still need resources to provide the services
  • They often rely on fundraising
  • Must convince people of the value of their service, and the need to support the organization