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Chapter 8
Intro to Business
Producing and Marketing goods and
Services
Role of Marketing
1. Idea for development of a new product.
2. Select product name
3. Where products sold and how to get them
there. (Channels of Distribution)
4. Set price and how people can pay for it.
1. (cash and carry/credit)
5. Customer service and product improvement
after product is sold.:)
Marketing Functions
1) Product/Service Planning-assists in design and
development by gathering information and testing
ideas.
2) Purchasing-identify and obtain the products needed
for marketing activities.
3) Financing-make sure financing and credit are available
for purchase and sale of products.
4) Distribution-getting products to customers.
5) Pricing-set prices and payment method.
6) Risk Management-provides security and safety for
products and people and reduces business risk.
7) Marketing Information Management-obtains and
organizes information needed to make marketing
decisions.
8) Promotion-communicating with consumers to
encourage purchase.:)
A Marketing Philosophy
The philosophy of business is known as the marketing
concept , which considers the needs of customers
when planning, pricing, distributing, and
promoting a product or service.
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To be successful, the business must be able to:
1) Identify customers they want to serve and
understand their needs.
2) Develop a product that will satisfy the customer and
complete the necessary marketing activities.
3) Complete these activities at a profit.:)
A Marketing Strategy
Is a two step process that involves:
1. Target Market-A clearly identified group of consumers
with needs that the business want to satisfy.
2. Marketing Mix-a combination of marketing elements
designed to meet the needs of a target market.
• The 4 P’s of Marketing:
1. Product-anything offered to the target market
to satisfy their needs (products or services).
2. Place-locations where product sold convenient
to customers.
3. Price-what customers are able to pay and
method of payment.
4. Promotion-methods used to communicate
information to customers in order to encourage
purchase.:)
Six Steps of Product Development
Buying Motives-the reasons for making a purchase.
(sometimes rational and logical, sometimes not):)
Getting Products and Services to Consumers
 Channel of Distribution-is the path that a product
travels from producer to consumer.
 Direct Channel of Distribution-from producer to
consumer.
 Indirect Channel of Distribution-goods move
through one or more middle firms between
producer to consumer.
 Wholesaler-a middle firm that assists with
distribution activities between businesses.
 Retailer-sells directly to consumer (may obtain
goods from wholesaler or producer) collect
products of many manufacturers and resells them.
(Wal-Mart, Target, Meijers):)
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Characteristics of Effective Distribution
 4 important differences to consider in developing an
effective channel of distribution.
1. Differences in Quantity-adjusts the large quantity
produced to the small quantity purchased.
2. Differences in Assortment-accumulate many
varieties of products in one place.
3. Differences in Location-brings products from all
over the world to convenient locations.
4. Differences in Time-having the right products at
the right time.:)
The Role of Pricing
 Objectives of Pricing-one of three goals
1. Maximize Profits-“how?”
2. Increase Sales-”how?”
3. Maintain Image-”how?” (Kobe!)
 Factors that will influence Price
1. Quantity-Walmart????
2. Customer Service Offered
3. Fragile and requires special handling.
4. Businesses in the channel of distribution-direct
vs. indirect.
5. Amount of advertising and Communications
necessary to inform consumers.:)
The Role of Pricing
 Promotional methods (3)
1. Who are prospective customers being targeted?
 How many and where?
2. What is the Message?
3. What is the budget for promotion?