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Marketing Indicator 1.01
Understand marketing’s role and
function in business to facilitate
economic exchanges with
customers.
A. Understand marketing’s
role and function in business
to facilitate economic
exchanges with customers.
REVIEW - What is Marketing?
• Links producers to the customers who buy their goods
and services
• Includes ALL activities to get product from
manufacturer to consumer that are guided by
consumer’s wants and needs
• Process of planning and executing the conception,
pricing, promotion, and distribution of ideas, goods,
and services to create exchanges that satisfy individual
and organizational objectives.
REVIEW Sales Concept VS.
Marketing Concept
• SC = Product development w/o proving demand, want or
need. Created regardless of whether anyone wants/needs it.
This is a good product idea because we think it is, not b/c
customers are asking for it.
• MC = Businesses must satisfy customers needs & wants in
order to make a profit.
• Businesses use the needs of customers as the primary focus
during the planning, production, distribution, & promotion of a
product or service.
Identify Marketing Activities.
• 4 foundations of Marketing
• 7 functions of Marketing
• SWOT Analysis
• Marketing Mix (4 P’s)
4 Foundations of Marketing
• Economics - study of allocating resources to maximize
their uses
• Business, Management, Entrepreneurship - study of
operating and managing a business & all the skills and
concept necessary
• Communication Skills – interacting with people and
organizations
• Professional Development – ongoing growth within a
career path
7 Functions of Marketing
1.
2.
3.
4.
5.
6.
7.
Distribution
Financing
Marketing Information Management
Pricing
Product / Service Management
Promotion
Selling
Define 7 Functions using 1 word:
•
•
•
•
•
•
•
channel management = distribution
marketing-information management = data
Pricing = price
product/service management = lifecycle
Promotion = communication
Selling = personal (1 on 1)
Financing = capital (investment, backing)
SWOT Analysis
MARKETING MIX – 4 P’s
 Interconnected/interdependent – actions in one P effect
decisions for the other P’s
 Each P has countless alternatives
 The better you know your target market, the easier the
decisions for the 4 P’s
 Successful combination = profitability
• 4 P’s
•
•
•
•
Product (Planning)
Price
Place
Promotion
PRODUCT PLANNING
• Considers the direction in which the firm is heading and how
marketing lines up with that direction
• This thinking process provides the basis for all marketing goals
and actions.
• Analyzes who the customers are and what goods or services
they need
• Determines which goods or services to produce, sell, or
provide
• Since coordinating all of the pieces of marketing is an essential
role of the marketer, thorough planning is necessary.
PRICE/PRICING
• Keeps two pricing issues in mind:
• Customer’s perception of value
• Selling firm’s objectives
• Make a profit?
• Goal is to strike the right balance.
PLACE
• DISTRIBUTION
• Figures out which steps to take to ensure a
timely delivery
• Download it via Internet?
• Transport it? How?
• Store it?
PROMOTION
• Conducts activities to capture attention about a good or
service
• Each activity involves contact with a customer, whether in
person or not.
• Examples:
•
•
•
•
Advertising—e.g., television commercials
Personal selling—e.g., door-to-door sales, professional sales
Publicity—e.g., press releases
Sales promotion—e.g., logo-imprinted giveaways
• Objectives include informing, persuading, and reminding.
What items can be marketed?
• Products (Goods & Services)
• Organizations
• Profit vs. Nonprofit
• Places - Tourist attractions, Cities
• Ideas – Stand Against Bullying, Click it or Ticket
• People – politicians, actors, singers
• Events – concerts, sports, olympics
Two categories of products
• Goods (tangible items)
• Durable vs. Non-durable
• Consumer vs. Industrial
• Services (intangible)
GOODS - TANGIBLE
• Durable (long lasting – washing machine)
• Nondurable goods (consumed within a short period of time
such as gasoline, toothpaste)
• Consumer goods are used for personal purposes (such as a
laptop to write a history paper or a cell phone to call your best
friend)
• Industrial goods are used for business purposes (such as a
commercial oven for a bakery)
• The same good could be consumer and/or industrial. The
goods’ use determines which it is.
• A laptop used to type a history paper is?
• A laptop used to bill customers is?
SERVICES - INTANGIBLE
Pay someone to do something for us
because:
• We do not have the skill (haircut) or
expertise (lawyer, doctor)
• We do not have the time (house
cleaning)
• We do not want to do it (lawn care)
REVIEW categories of products
• Goods – tangible purchases
• Durable vs. Nondurable
• Consumer vs. Industrial
• Services – intangible purchases
• Consumer vs. Industrial
Where does Marketing Occur?
• Everyday by people, in places,
with communication
• Marketing occurs wherever
customers are
Where have you
recently
seen an
advertisement?
Marketing IS EVERYWHERE!
MARKETING CONCEPT
DEFINITION = A philosophy of
conducting business that is based
on the belief that all business
activities should be aimed toward
satisfying consumer wants and
needs while achieving company
goals.
Explain the elements of the
MARKETING CONCEPT
• Customer Orientation
• Business focus on building relationships w/ customers to
facilitate loyal, repeat customers for life. Do it their way.
• Finding out what customers want and producing those
products the way they want them
• Customer Satisfaction
• Meet or exceed customer’s expectations
• Customer Needs / Wants
• Desires of the consumers that convert into purchases
Explain the elements of the
MARKETING CONCEPT
• Company Approach
• Employees working together to satisfy their customers to earn
profits
• Company Commitment
• All employees focused on the customers.
• Do it better. Make/price the product better than the
competition’s model.
• Company Goals
• Goals should be focused on satisfying customers
• Do it with success in mind. Maintain your firm’s purpose
while you apply the marketing concept.
Explain the elements of the
marketing concept.
• CRM – (Customer Relationship Management)
combines customer information via databases
with customer service and marketing
communication
• Marketing Loyalty Programs – Rewards repeat
customers
• Product – business provides items that satisfy
desires of consumers
• Profits – Money business keeps after paying all
expenses
REVIEW Marketing Concept
• FOCUS ON THE CUSTOMER!
• WITHOUT THE CUSTOMER – NO
$$$!
What is Marketing’s Role in a Private
Enterprise System?
• Marketing fits into every facet of our lives,
whether on a global scale or right in our own
neighborhoods.
• Provides benefits that make our lives better,
promoting using natural resources more wisely,
and encourage international trade.
• Without marketing, we would all have to be
self-sufficient.
Explain the role of marketing in a
private/free enterprise system.
• Create awareness of product / service
• Have access to product / service
• Multiple channels to purchase product / service
REVIEW Role of Marketing in the
Private Enterprise System
• People buy and sell goods and services
daily so they can feed their families,
increase profits, and hopefully hire others.
• Domino effect – if one is knocked down
the others will follow
• If a person has a job, they have money.
They can spend money on goods and
services and pay others using their
money. This keeps others employed.
Describe ways in which consumers and
businesses would be affected if marketing
did not exist.
• Society would remain self-subsistence style of
living.
• Less competition = Higher prices
• Less choices, less improvements, less info.
REVIEW - How would consumers
and businesses be affected if
marketing did not exist?
• Our nation would have difficulty linking
producers to consumers.
• Our own routines would be different
because marketing shapes everything
we do.
• Ex: Out of milk? Go to the store.
What store? Where?
BENEFITS OF MARKETING
Marketing bridges the gap
between you & maker/seller of an
item. Marketing makes it easy for
consumers to buy what they
want/need. It creates new &
improved products at lower prices
BENEFITS OF MARKETING
(cont.)
• The 7 Functions of Marketing add
value to a product/service.
• Economic term for this: UTILITY
= Added value
• 5 economic utilities involved
w/all products – only 4 directly
related to marketing
SIDE NOTE – 5 UTILITIES of
MARKETING
• Form
• Involves changing raw materials, putting parts together to make
them more useful – not directly related to marketing!
• Deals with making/producing things
• Place
• Location – having the product where customers can buy it
• Time
• Having the product available when the customer wants/needs it
• Possession
• Exchange of a product/service for some monetary value
• Information
• Communication with the consumer
BENEFITS OF MARKETING
(cont.)
• Lower prices
• When Marketing activities increase demand
• Manufacturers can make products in larger
quantities
• Reducing the cost of production
• Lower price, higher sales, higher profit
BENEFITS OF MARKETING
(cont.)
• New & Improved Products
• When products/services become more
popular (higher demand)
• More competitors enter the marketplace
• Increased competition, businesses look
for ways to better satisfy wants & needs
• Thus larger variety of goods & services
REVIEW Marketing benefits our
society.
• Increased competition = Lower prices
• Variety of goods/services
• Mass communication about items
• Foreign and domestic societies benefit
REVIEW MARKETING Makes our lives
better
• Because problem solving is at the heart of marketing, each
year we add some new products to our home, often at
lower prices.
• Promotes using the earth’s resources more wisely
• If available resources are used sensibly, benefits can extend
well into the future for the marketer, the nation, and the
entire world.
• Encourages trade between nations
• Because resources are valuable to marketers, it doesn’t take
them long to pinpoint where a particular resource can be
found in abundance.
• If our nation lacks a resource, we can usually trade something
to get it.
REVIEW The benefits to
marketing are…
“Marketing is beneficial to
consumers because it brings new
and improved products to the market, as well
as lowering prices.”
REVIEW How Does Marketing
Benefit Our Society?
• Marketing visibly benefits
• our lives,
• our natural surroundings, and
• our global trade.
B. Describe marketing functions
and related activities
Define the following terms using 1 word:
1. channel management = distribution
2. marketing-information management = data
3. Pricing = price
4. product/service management = lifecycle
5. Promotion = communication
6. Selling = personal (1 on 1)
7. Financing = capital (investment, backing)
Explain the purposes of each
marketing function.
1.Distribution –
Transporting, storing, and handling
goods from the manufacturer to the
consumer. Large impact on pricing due
to transportation costs.
Channel management (a.k.a.)
Distribution
• Responsible for moving, storing, locating, and/or transferring
ownership of goods and services
• Main goal is to move products from the producer to the
consumer.
• Determines who will offer products and where they will be
offered
• Develops relationships with channel members
• Assesses quality of vendor performance
Explain the purposes of each
marketing function.
2. Financing – Manage cash needs of a
business on a daily basis for future needs.
Most businesses struggle the first years
Explain the purposes of each
marketing function.
• 3. MIM – (marketing information management)
provides usable info. to make business decisions.
Ex. Google Analytics, Surveys to determine
preferences of products, develop prototype for
testing, implement new process and gather info.
about possible problems
Marketing-information
management (MIM)
• Provides data that can be used for business decision-making
• Provides data about effectiveness of marketing efforts
• Provides data about customer satisfaction, customer loyalty,
needs, and wants
Explain the purposes of each
marketing function.
4. Pricing – Determining a value to charge in
order to make a profit.
Pricing
• Establishes products’ prices
• Determines whether prices need to be adjusted
• Sets policies and objectives for prices
Explain the purposes of each
marketing function.
5. Product Service Management – Designing,
producing, maintaining, improving, and
obtaining products to meet customer’s wants
and needs
Product/Service Management
• Helps to determine which products a business will offer and in
what quantities
• Aids in determining and developing a company’s/product’s
image
• Provides direction for other marketing activities based on
changes in a product’s life cycle
Explain the purposes of each
marketing function.
6. Promotion - Communication that is
used to inform, persuade, or remind
customers about a business’s products.
(Advertising)
Promotion
• Reminds customers about products/businesses
• Informs customers about products/businesses
• Persuades customers about products/businesses
Explain the purposes of each
marketing function.
• 7. Selling - Determining and responding to
customer’s needs and wants through
personalized communication (face-to-face)
•
Selling
• Creates a following of loyal customers
• Completes the exchange transaction
• Provides services for customers
Describe the importance of each
marketing function to marketing.
CHANNEL MGT/Distribution is important to marketing because:
• Gets products from producers to consumers so they are on
hand when consumers want to buy.
• Allows adequate supplies of products in the right place at
the right time.
• This function includes selecting methods of transporting
products.
• Some methods are less expensive than others.
• Making the right decision helps to control expenses.
Describe the importance of each
marketing function to marketing
FINANCING
Without money, cannot purchase goods, pay employees, pay for
promotions, pay for transporting goods, pay rent for the
offices/stores, cannot buy equipment or supplies, etc.
Describe the importance of each
marketing function to marketing.
Marketing-Information Management
is important to marketing because:
• Allows businesses to make decisions based on information
gathered rather than making guesses
• Goal is to forecast, or predict, what will be happening that
might affect the business in the future.
• Might lose money because they are not keeping up with the
times or selling the right products
Describe the importance of each
marketing function to marketing.
Pricing is important to marketing because
• Affects how well a product will sell and how much profit the
business will make
• Businesses need to set prices that customers are willing to
pay.
• Prices need to cover costs and include sufficient profit.
Describe the importance of each
marketing function to marketing.
Product/Service Management is important to marketing
because
• Involves deciding on the products that a business will produce
or offer
• Businesses must offer the products that customers want and
need to be successful.
• Helps businesses decide on the type of image they want
customers to have of them and their products.
• Rely on the marketing-information management function to
provide the necessary data.
Describe the importance of each
marketing function to marketing.
Promotion is important to marketing because
• Can create and/or increase consumer demand for products.
• Promotions inform customers about:
• New products
• Improved products
• New uses for existing products
• Special values on products
• Helps to create an image or impression of a business.
• A business might want to change its image to attract a different or
expanded target market.
• Coordinated advertising and public relations will get the message
across.
Describe the importance of each
marketing function to marketing..
Selling is important to marketing because
• This function is important because it involves contact with
customers.
• Other marketing functions pave the way for successful selling.
• Businesses work to meet customers’ needs and sell them the
most appropriate product.
• All businesses have something to sell.
Describe the importance of each
marketing function to marketing.
SELLING CONT.
• Everyone benefits from selling.
• Selling benefits businesses - Creates a
desire for their products, Helps get their
products into the hands of consumers
• Selling benefits consumers by providing Help with their buying decisions, Information
about new products
• Selling can benefit society - Creates
employment. Encourages economic growth
Explain the interrelationships
among marketing functions.
MIM
Pricing
Promotion
Financing
PSM
Distribution
Selling
How do they work together?
The interrelationships among
marketing functions
• Can’t forget to advertise even if you have a great
product
• Can’t forget to have a sufficient supply of those
great products in stock for an upcoming sale
• Can’t forget to set prices that are competitive
and attract customers
• Forgetting any of these functions means your
marketing effort won’t be as effective.
• Your competitors will have an advantage…YIKES!
ACTIVITY 1
• Think of 1 good and 1 service that you have used
in the past 24 hours & write it down. Respond to
the following questions for EACH:
• How did you come to use these
goods/services?
• How did you find out about these
goods/services?
• Where did you obtain these goods/services?
• How much did these goods/services cost?
ACTIVITY 2
• Use your notes as a guide
• In teams of 2:
• List & Define each function using 1 word and provide 2
examples for each function.
• List the 4 P’s of the Marketing Mix and provide 2
examples for each
• Choose one of the functions and create a QUALITY
multiple choice question to share with the class
• Choose one of the 4 P’s and create a QUALITY multiple
choice question to share with the class
Short Answer Quiz
1. Give an example of a need and a want.
2. What is a target market?
3. Give an example explaining who is a
customer and who is a consumer.
4. The marketing concept philosophy
indicates that a business will satisfy the
wants and needs of _______________
and still make a profit.
5. List the two categories of products and
explain how they are different.