Download Marketing

Chapter One
Marketing Is All
Around Us!
Section 1.1
Marketing and the Marketing Concept
Objectives
• Define marketing
• Explain the four foundations of marketing
• List the seven functions of marketing
• Understand the marketing concept
Section 1.1
Marketing and the Marketing Concept
Key Terms
• Marketing
• Goods
• Services
• Marketing concept
The Scope of Marketing
• Marketing is a broad term that
includes many activities and requires
many skills
• Marketing is the process of planning,
pricing, promoting, selling, and
distributing ideas goods or services
to create exchanges that satisfy
customers
Ideas, Goods and Services
• Marketing promotes ideas, goods, and
services
• Goods are tangible items that have
monetary value and satisfy your needs
and wants
• Services are intangible items that have
monetary value and satisfy your needs
and wants
Ideas, Goods and Services
• Intangible means you cannot physically
touch them
• The marketplace is the commercial
environment where trades happen
Foundations of Marketing
The practice of marketing depends
on four key areas of knowledge
•Business, management, entrepreneurship
•Communication and interpersonal skills
•Economics
•Professional development
Business Management
Entrepreneurship
• Understanding the basics of
business, management, and
entrepreneurial concepts that affect
business decision making
Communication and
Interpersonal Skills
• Understanding concepts,
strategies, and systems needed
to interact effectively with
others
Economics
• Understanding the economic
principles and concepts that are
basic to marketing
Professional Development
• Understanding concepts and
strategies needed for career
exploration, development, and
growth
Seven Functions of Marketing
• Distribution
• Financing
• Marketing Information Management
• Pricing
• Product/Service Management
• Promotion
• Selling
Distribution
• The process of deciding how to get
goods in customers’ hands
• Physically moving and storing
goods is part of distribution
• Main forms are truck, rail, ship, or
air
Financing
• Getting the money necessary to
pay for setting up and running a
business
• Owners often obtain loans and sell
shares of their business
Marketing Information
Management
• Gathering information, storing it,
and analyzing it are all part of
marketing information
management.
• Companies conduct research so
they can be successful at marketing
and selling their products.
Pricing
• Pricing decisions are based on
costs and on what competitors
charge for the same product or
service.
• To determine a price, marketers
must also determine how much
customers are willing to pay.
Product/Service Management
• Obtaining, developing, maintaining,
and improving a product or a
product mix is product/service
management.
Promotion
• The effort to inform, persuade, or
remind potential customers about a
business’s products or services,
such as radio commercials.
• Also, it could be used to improve a
company’s public image.
Selling
• Selling provides customers with the
goods and services they want.
• The selling process influences
purchasing decisions and enhances
future business opportunities.
The Marketing Concept
• Marketing Concept is the idea that
a business should strive to satisfy
customers’ needs and wants while
generating a profit for the firm.
• The message is that the customer
satisfaction is most important.
Customer Relationship
Management (CRM)
• In today’s marketplace, customer
relationship is most important.
• Customer relationship management
(CRM) is an aspect of marketing that
combines customer information with
customer service and marketing
communications.
• Marketers who uses CRM tries to create
more meaningful one-on-one
communications with the customer.
Section 1.2
The Importance of Marketing
Objectives
• Analyze the benefits of marketing
• Apply the concept of utility
Key Term
• Utility
The Main Idea
• Marketing is a key part of our
economy because it supports
competition and offers benefits to
consumers.
Economic Benefits of
Marketing
• Through the study of marketing, you
will realize just how important
marketing is and how much it affects
your life and the lives of other
consumers.
• Also consider how it affects our
economy and standard of living.
Economic Benefits of
Marketing (cont)
• Marketing provides the means for
competition to take place
• In a competitive marketplace,
businesses try to create new or
improved products at lower prices
than their competitors.
Economic Benefits of
Marketing (cont)
• Businesses are forced to be
efficient and responsive to
consumers
• Businesses look for ways to add
value to a consumer’s shopping
experience.
New and Improved Products
• Businesses are always looking for
ways to satisfy customers’ wants
and needs and to keep customers
interested.
Example: Personal computers
have gotten smaller, lighter, more
powerful and less expensive.
New & Improved Products
Example
• Give an example of how consumer
demand can influence what
changes are made to existing
products.
Lower Prices
• Marketing activities increase demand,
and this helps to lower prices.
• When demand is high, manufacturers can
produce products in larger quantities and
this reduces the unit cost of each product.
 This is because the fixed costs (such as rent
on a building) remain the same whether the
company produces 10 units or 10,000 units.
Added Value & Utility
• The functions of marketing add
value to a product.
• This added value in economic
terms is called utility.
• Utilities are the attributes of a
product or service that make it
capable of satisfying customers’
wants and needs.
Economic Utilities
• There are five economic unities involved with all
products:
 Form
 Place
 Time
 Possession
 Information
Note: Form utility is not directly related to marketing,
however what goes into creating new products, such as
marketing research and product design is an integral part of
the marketing process.
Form Utility
• Form utility involves changing
raw materials or putting parts
together to make them more
useful. In other words, it
deals with making or
producing things.
• Form utility involves making
products that consumers
need and want.
Example: Taking lumber from
the forest and turning it into a
desk
Place Utility
• Place utility involves having a product
where customers can buy it.
• Businesses study consumer shopping
habits to determine the most convenient
and efficient locations to sell products.
• Some businesses uses the catalog,
while others rely on retailers.
Time Utility
• Time Utility is having a product available at a
certain time of year or a convenient time of
day.
• Retailers often have extended shopping hours
during the busiest shopping season of the
year, from Thanksgiving till Christmas.
• Marketers increase the value of products by
having them available when consumers want
them.
Possession Utility
• The exchange of a product for money is
possession utility.
• Retailers may accept alternatives to cash,
such as personal checks, debit or credit
cards, in exchange for their merchandise.
• Retailers may offer installment or layaway
plans (delayed possession in return for
gradual payment).
Information Utility
• Information utility involves communication with
the consumer.
• Salespeople provide information to customers
by explaining the features and benefits of
products.
 Packaging and labeling information
 Clothes labels
 Manufacturers owners manual
Section 1.3
Fundamentals of Marketing
Objectives
• Describe the concept of market
• Differentiate consumer and industrial
markets
• Describe market share
• Define target market
• List the components of the marketing
mix
Section 1.3
Key Terms
• Market
• Consumer market
• Industrial market
• Market share
• Target market
• Customer profile
• Marketing Mix
• Michelle was here.
The Main Idea
• Market refers to all the people who
might buy a product or service. The
marketing mix is a set of four tools
or strategies the marketer uses to
influence buying decisions
Market & Market
Identification
• Marketers know that their product or
service cannot appeal to everyone.
• To do their job, they look for people
who might have an interest in or a
need for their product
They also look at people who have the
ability to pay for their
products.
Market & Market
Identification
• All people who share similar needs and
wants and who have the ability to
purchase a given product are called a
market
 If you liked video games and had the
resources to buy or rent them, you would be
part of the video game market
Consumer vs. Industrial
Markets
• There are different types of markets
 Consumer markets consists of consumers
who purchase goods and services for
personal use
 Industrial markets (business to business
markets) include all businesses that buy
products for use in their operations
Consumer Markets
• Consumers’ needs and wants generally
fall into categories that address their
lifestyles
• Consumers are interested in products
that will save them money, make life
easier, improve their appearance and
provides personal satisfaction
Industrial Market
• The goals and objectives of business firms
are different from consumer markets
• Main goal is to improve profit
• Companies want to improve productivity,
increase sales, decrease expenses or in
some way make their work more efficient
Industrial Markets
• Companies that produce product for sale in
the consumer market consider the reseller
of their products to be part of the industrial
market
Market Share
• A market is further described by the total sales
in a product category.
• A company’s market share is its percentage of
the total sales volume generated by all
companies that compete in a given market
Market Share
• Knowing ones market share helps marketers
analyze their competition and their status in a
given market.
• Market shares change all the time as new
competitors enter the market and as the size of
the market increases or decreases in volume
Target Market & Market
Segmentation
• Businesses look for ways to offer their
product or service to the people who
are most likely to be interested
• This involves segmenting, or breaking
down the market into smaller groups
that have similar needs.
• The group that is identified for a
specific marketing program is the
target market.
Consumers vs. Customers
• A product may have more than one target
market.
 Manufacturers of children cereal know that they
need to target children and parents differently.
• Consumers use the product and customers buy
the product.
Customer Profile
• To develop a clear picture of their target
market, businesses create a customer profile.
• A customer profile lists information about the
target market, such as age, income level, ethnic
background, occupation, attitudes, lifestyle, and
geographic residence.
Marketing Mix
• The marketing mix includes four basic
marketing strategies called the four Ps:
Product
Place
Price
Promotion
• The four elements of the marketing
mix are interconnected.
Product
• Product decisions begin with choosing what
products to make and sell.
• A product’s features, brand name, packaging,
service, and warranty are all part of the
development.
• By developing new uses and identifying new
target markets, a company can extend the life
of a product.
Place
• The means of getting the product into
the consumer’s hands is the place factor
of the marketing mix.
• Place strategies determine how and
where a product will be distributed
Pricing Strategies
• Price strategies therefore include arriving
at the list price or manufacturer’s
suggested retail price, as well as
discounts, allowances, credit terms, and
payment period for industrial customers.
• A company may use special promotional
pricing that would adjust the suggested
retail price.
• A manufacturer may decide to use a
promotional price for a fixed period of time.
Price
• Price is what is exchanged for the product.
• Price strategies should reflect what customers
are willing and able to pay.
• Pricing decisions also take into account prices
the competition charges for comparable
products.
Promotion
• Promotion refers to decisions about
advertising, personal selling, sales
promotion, and publicity.
• Promotional strategies deal with how
potential customers will be told about a
company’s product.