Download Chapter 11 Guided Notes

MARKETING AND
DISTRIBUTION
CHAPTER 11
LEARNING OBJECTIVE
• I can identify what marketing is and the important
role it plays in selling products
DEVELOPMENT OF MARKETING
• Marketing
• History of Marketing by what the focus has been on
• Production
• Sales
• Advertising
• Consumer Sovereignty
• Consumer making choices for market production
• Today – How will product add to
LEARNING OBJECTIVE
• I can identify what marketing is and the important
role it plays in selling products
LEARNING OBJECTIVE
• I can identify and give examples of the 4 types of
utility
4 TYPES OF UTILITY
• Form Utility
• Example???
• Place Utility
• Example???
• Time Utility
• Example???
• Ownership Utility
• Example???
LEARNING OBJECTIVE
• I can identify and give examples of the 4 types of
utility
LEARNING OBJECTIVE
• I can identify the purpose of Market Research and
describe how it is done
MARKET RESEARCH
• Process using research methods to find out what consumer
• Research used to determine how to promote product
• What is target Audience?
• What is most effective way to reach audience?
• When is Market Research done?
• Beginning of Product Development
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What do consumers want in a product
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Taste testing or product sampling
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Is there a market for the good or service
Who is our intended audience?
Do we need to change product before we offer for sale?
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Is advertising attracting intended buyers?
Is product working for consumers as expected?
What can we do to increase or maintain current sales?
• After development
• Purpose
• Immediately After release
PRODUCT DEVELOPMENT
• Step 1
• Conduct a survey
• Who are users of product
• Age, gender, income, education, location (urban, rural, suburban)
• Questionnaire, Individual interviews, focus group discussions, online
• Step 2
• Test Market the product
• Select small area to release the product
• Track sales at various prices
• If doing poorly
• Alter (very costly) or Abandon the product
• If doing well
• Offer nationally
• Very few make it to this level
• Why do producers continue to make new???
• Opportunity of high profit product
LEARNING OBJECTIVE
• I can identify the purpose of Market Research and
describe how it is done
LEARNING OBJECTIVE
• I understand the purpose of a Marketing Strategy
and can describe the 4 P’s of Marketing
“FOUR PS” OF MARKETING
• Companies will develop a marketing strategy
• Details how to successfully sell product
• Includes 4 Ps of Marketing
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Product
Price
Place
Promotion
PRODUCT
• Market research determines
• What to sell
• Marketing Department also determines
• Services to offer with product
• Warranties
• How to Package product
• Size, design, color, coupons (repeat buyers), rebate offers
• EX. New and Improved, Economy Size
• What identification to use
• Attract consumers to look at, buy, and remember a product
• Uses a logo, colors, a song, etc
PRICE
• Ultimately decided by Supply and Demand
• BUT, Producer must consider costs of
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Production
Advertising
Selling
Distributing
How much profit desired
• When first introduced Penetration Pricing often used
• Low introduction price to lure consumers away from similar product
• Another tactic is to offer coupons
• If consumer satisfied, will buy again without coupon
• Prices also determined by Price Leadership
• One firm lowers, all others lower
• One firm raises, all other raise
PLACE
• Where should product be sold
• Mail, telephone, department stores, specialty shops,
supermarkets, discount stores, door-to-door, or on Internet
• Could be combination of many
• Other considerations???
• Location within a store
• Cereal/Candy at children’s eye level
• More expensive items at Adult eye level/Nearest door
• Mail Order Catalogs/Specialty Shops
• Geographic Location
• Rural vs. Urban
PROMOTION
• Use of advertising to inform consumers new or
improved product is available
• Seeks to convince to purchase new item
• Type of Promotion depends on 3 factors
• Product
• Type of consumer company wants to attract
• Amount company plans to spend
• Teen Product – teen magazine or Social Media site
• Credit Card Company – Usually Direct mail
advertising
• Other Promotions:
• Free Samples, Cents-off coupons, gifts, rebates
LEARNING OBJECTIVE
• I understand the purpose of a Marketing Strategy
and can describe the 4 P’s of Marketing
LEARNING OBJECTIVE
• I know and understand a product’s life cycle
PRODUCT LIFE CYCLE
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Introduction
Growth
Maturity
Decline
Important to understand because marketing different at
each stage
• Introduction – product must be explained more thoroughly –
Prices lower to entice buyers
• Growth – Prices much higher to maximize profits
• Maturity – Slightly lower prices • Decline
• Redesign Packaging
• Find new uses for product
• Refocus advertising
LEARNING OBJECTIVE
• I know and understand a product’s life cycle