Essential Standard 3.00

1. Essential Standard 3.00 Understand the role marketing in business.

2. Objective 3.01 Understand principles of marketing.

3. Topics • Functions of marketing • Importance of marketing research to the creation or improvement of products or services • Selling prices of products and services • Classification of channels of distribution • Classification of the main types of promotion

4. Starter • Define Key Terms on page 236.

5. Functions of marketing

6. Functions of Marketing • What happens during the marketing process? • Businesses are involved in the process of origin, pricing, promotion, and distribution of products and services. • These products and services are made available in order to meet the goals of individuals and businesses. • Activities of marketing happen throughout the seven functions of marketing

8. Marketing-information management • Involves obtaining, managing, and using information about products and services, customers, and competitors to improve business decision-making and the performance of marketing activities.

9. Product/service management • May include several businesses involved with designing, developing, maintaining, improving, and obtaining products and services in order to meet the needs of customers.

10. Pricing • Involves determining and communicating the value of products and services.

11. Place (Distribution) • Involves using the best ways for customers to locate, obtain, and use the products and services of a business.

12. Selling • Involves communicating directly with potential customers in order to determine and satisfy their needs and wants.

13. Financing • Involves budgeting for marketing activities, securing necessary funds for operations, and providing financial assistance to customers.

14. Promotion • Involves communicating information such as features and prices about products and services to potential customers.

15. Critical Thinking • Why is each marketing function needed whenever a product or service is sold? • Can promotion influence the quantity of a product consumers purchase?

16. To Do: • Complete Marketing in Your Town Activity. NOTE: Use Make Academic Connection Marketing Activity on page 242 in Intro to Business, 6e, Thomson South Western textbook as a guide. • Read 10-1 (Pages 236-242 then answer Goal Questions on page 236 and Key Concepts (1-3) on page 242.

17. STOP

18. Starter • Define Key Terms on page 243.

19. Importance of marketing research to the creation or improvement of products or services

20. Marketing Research • What is marketing research? • Marketing research involves customers in order to find solutions to problems through carefully designed studies. • Steps in marketing research: • Define the marketing problem. • Study the situation. • Develop a data collection procedure. • Gather and analyze information. • Propose a solution.

22. Marketing Research continued Similarities of products and services • Meet the needs or satisfaction of a target market • Include a mix of the marketing elements: product, price, promotion, and place (distribution)

23. Marketing Research continued Differences between products and services ProductsServices Tangible Intangible Non-perishable or perishable Perishable Separable Inseparable Easier to market More difficult to market More control over quality Less control over quality

24. To Do: • Complete the Marketing Research Activity. NOTE: Use Make Academic Connection Research Activity on page 242 in Intro to Business, 6e, Thomson South Western textbook as a guide. • Read 10-2 (pages 243-248) then answer Goals questions on page 243 and Key Concepts on page 248.

25. STOP

26. Starter • Define Key Terms on page 250.

27. Selling prices of products and services

28. Selling Prices of Products and Services • What factors influence the pricing of products and services? • Supply and demand • Uniqueness • Age • Season • Complexity • Convenience • Pricing formula Selling price =product costs + operating expenses + profit Example: $215=67+38+100

29. Selling Prices of Products and Services • Selling Price = the price paid by the customer for the product. • Product Costs = the costs to the manufacturer for producing the product or the price paid by other businesses to buy the product. • Operating Expenses = all expenses of operating the business that are associated with the product. I.e. salaries, storage, facilities, utilities, taxes, etc. • Profit = the amount of money available to the business after all costs and expenses have been paid.

30. Selling Prices of Products and Services continued • What is markup? • the amount charged of the selling price to cover the operating expenses and profit usually stated as a percent. • Selling price = product cost + markup • Example: $35+$14=$49 • $35*40%=$14 • What is a markdown? • a reduction from the original selling price.

31. To Do: • Complete the Price Components Activity • Read 10-3 (pages 250-254) then answer Goals questions on page 250 and Key Concepts on page 254.

32. STOP

33. Starter • Define Key Terms on page 255.

34. Classification of distribution and promotion

35. Classification of Channels of Distribution • What is channel of distribution? • The channels of distribution is how products and services reach final customers and the businesses involved. • How does having a channel of distribution help businesses? • Channels of distribution allow businesses to adjust quantity and assortments accessible in convenient locations for customers and storage of products.

36. Classification of Channels of Distribution continued Types of channels of distribution: • Direct • Direct involves the exchange of products and services between producer and consumer only. • Examples of direct: • Local cleaning company promotes its business and provides services to its local customers. • Mary sells her famous juices at the local festivals. • Tonya makes and sells drapes to local customers. • Indirect • Indirect involves the exchange of products and services with one or more business and consumer. • Examples of indirect: • Drugstores sell Maybelline Cosmetics. • Macy’s sells Nautica line of clothing • UPS delivers packages for Ann Taylor.

37. Classification of the Main Types of Promotion • How do you know when communication is effective? • Effective communication consists of an understanding of information between the sender and the receiver. • The sender selects a channel of communication and the receiver indicates understanding by providing some form of feedback. • What is the relationship between effective communication and promotion? • Businesses use promotion to communicate with potential customers about their products and services. Information about products and services is encoded in a promotional message. Promotional messages may be delivered through advertisements and sales representatives. Potential customers decode the message and provide feedback by way of purchasing or inquiring about products or services.

38. Components of Effective Communication Sender

39. Classification of the Main Types of Promotion continued • Main types of promotion: • Personalized is customized for individual customer. • Mass promotion is communicated with many people with a common message. • What are some examples of personalized promotion? • Examples of personalized promotion: visits, telephone calls, live audio and video Internet connections • What are some types of mass promotion? • Types of mass promotion: advertisement, publicity, public relations, sales promotion