Download Chapter 1 – World of Marketing

Chapter 1 – World of Marketing
Section 1.1: What is Marketing?
Because of competition, an organized
Marketing Plan is essential.
The process of developing, promoting, and
distributing products, or goods and services, to satisfy
customers’ needs and wants.
Define “Marketing”.
Goods are tangible items such as sports equipment. That is, you can touch and feel them.
Services are intangible products, such as going to a movie. That is, you cannot touch or feel it.
The Marketing Process
Developing products involve studying consumers to determine what they want, and then designing
the products that will
satisfy their needs and wants.
Promotional activities help to educate consumers, create interest and desire, make a sale, and
create an
image for a company and its products.
Distribution is the means of getting the product into the hands of the customer.
Successful organizations follow a
Marketing Concept .
Idea that organizations need to satisfy
their customers while also trying to reach their
organizations’ goals.
Define “Marketing Concept”.
The first step in creating a marketing concept involves identifying the
Customers.
Potential customers with shared needs who
have the desire and ability to buy a product.
Define “Market”.
Organizations spend lots of money to learn about their customers’
needs and wants.
A lack of basic necessities, such as food,
clothing, or shelter.
Define “Needs”.
Things that people desire based on personality,
experiences, or information about a product.
Define “Wants”.
Having a clear picture about the
accomplish.
target market makes developing a marketing plan easier to
A specific group of consumers that an
organization selects as the focus of its marketing plan.
Define “Target Market”.
Back in the 1950’s
mass marketing was more common. This involves promoting products with
one key message that is directed to everyone.
Today, marketing efforts are more sophisticated due to
and
availability of information
computer technology.
The U.S. census provides useful information about the
demographics of our nation.
Statistics that describe a population in
terms of personal characteristics.
Define “Demographics”.
Businesses use demographic information to develop their
marketing plans.
Age, income, occupation, gender,
ethnic background, and educational levels.
Examples of Demographics include:
Marketers use a tool to develop strategies called the
Marketing mix.
A combination of four basic marketing
strategies, known as the 4 P’s—product, place, price, and
promotion.
Define “Marketing Mix”.
To be effective, all 4 P’s in a marketing plan must focus on the
target market.
Product decisions involve the goods, services, or ideas used to satisfy consumer needs.
Designing, Naming, and packaging a product are major considerations.
Price decisions
involve the exchange process between the customer and the seller.
Price Determination Factors include (4 of them):
a. Cost of making or buying a product for resale.
b. Expenses related to marketing the product.
c.
Competition
d. What the consumer is willing to pay.
Place decisions involve making the product available to the customer. Place decisions also
include determining a
channel of distribution.
Path a product takes from the
producer to consumer.
Define “Channel of Distribution”.
Promotion decisions involve how the goods or services are communicated to the consumer.
Promotions may use any combination of advertising, sales promotion, publicity, and personal
selling.
Section 1.2: Economics of Marketing
The
Economics of marketing sports and entertainment have a great impact globally as well as
locally.
The study of the choices and decisions that
affect making, distributing, and using goods and services.
Define “Economics”.
A measure of economic growth is the
Gross Domestic Product
.
The value of all goods and services produced within
a country.
2% of the GDP is represented by Agriculture. 18% is represented by Industry and 80% is represented
Define “GDP”.
by
Services.
Profit allows companies to stay in business.
Money left after all costs and expenses of a business
are paid.
As with most businesses, there is a financial risk, or possible loss involve with sports and
Define “Profit”.
entertainment events.
Competition is the basis of the free enterprise system.
Define “Competition”.
The struggle among companies for customers.
Two other risks handled by businesses are
Unforeseen happenings and Lawsuits.
2 ways to handle these risks are insurance and
event planning.
Price competition follows the concept of
substitutes.
product is
proper employee training and
demand elasticity and available
That is, when there are many
substitutes for a product, demand for a
elastic, meaning that a change in price affects demand for your product.
Define “Supply”.
All the products available for sale.
Define “Demand”.
The customers’ desire to buy products.
If there is limited supply and high demand, businesses can charge
products available and low demand, prices need to be
Non-price competition
or
HIGHER prices. If there is a great number of
LOWER.
involves factors other than price, such as
quality, service,
image.
Inherent in the free enterprise system is the right to
Intellectual property rights are
own property and start a business.
intangible and are protected by patents, copyrights, and
trademarks.
The legal protection of a creator’s intellectual
property or products.
Define “Copyright”.
A payment you receive for use of your
copyrighted material.
Define “Royalty”.
How do royalties work?
a payment.
Patents are granted for
from others
Every time a clip is aired the artist receives
20 years to protect owners of patented products. Patented inventions are protected
making, using, importing, selling or offering them for sale..
Trademarks on
words, names, symbols, sounds, or colors distinguish goods and
services are also registered with the USPTO. Trademarks can be
image, reputation
, and
renewed over and over again. A company’s
profits are linked to its trademark.
TYPES OF BUSINESS OWNERSHIP
Sole proprietorship of a business involves only one owner.
Benefits are (4 of them):
a. Ease in starting and ending the business.
b. Complete control
c.
All decisions made by one owner
d. All profits go to the owner
Disadvantages are (3 of them):
a. Lack of finances to expand
b. Unlimited liability
c.
Time spent to run business
When there are 2 or more owners, the business is a
partnership.
Advantages are (4 of them):
a. Shared financial investment
b. Shared responsibilities
c.
Shared expertise
d. Ability to expand
Disadvantages are (5 of them):
a. Unlimited liability
b. Difficulty in withdrawing
c. Death dissolves partnership
d. Disagreements
e. Share Profits
It is a good idea to prepare a
cover the
partnership agreement
before starting a business. It should
% of partner investment, Share in profits/losses, partners’
responsibilities, as well as how the partnership will handle the death of a partner.
A partnership may have a
silent partner making the business a limited partnership.
There must be at least one
general partner who assumes unlimited liability. All of the limited partners
enjoy
A
limited liability.
corporation is a business entity that has the ability to conduct business and enter into contracts apart
from its owner or owners. It must be
chartered, which requires providing information to the state in which it
plans to operate. The information needed includes
name , number of shareholders,
type of business, products, selling location and members of
board of directors.
Owners of a corporation are called
stockholders or shareholders.
Corporation advantages (5 of them) include:
a. ability to generate capital investment
b. limited liability
c.
ability to expand
d. ease of joining and leaving
e. ability to hire experts
Disadvantages (4 of them) include:
a. complex structure
b. higher tax rate
c.
double taxation
d. increased govt. regulations
An
S corporation must follow all the same govt. regulations but is taxed like a partnership. Restrictions
include:
no more than 35 shareholders and no more than 80% of
revenue can come from foreign sources.
Host locations benefit economically from sports and/or entertainment events and marketing.
On a local level, sporting events and entertainment venues economically impart areas in which they operate because
they draw audiences.
Hosting the
Olympics creates a huge economic impact on a region before, during, and after the event. Most
Olympic sites expect the economic impact to continue well after the Game are over because of the
during the Games.
publicity