Download Use for SEM 1 (1.02) Basic Terms/Concepts Marketing Review

Use for SEM 1 (1.02) Basic Terms/Concepts Marketing Review
Marketing is the process of developing, promoting, pricing and distributing products in order to
satisfy customers’ needs and wants. Marketing involves all the activities necessary to get a
product from the producer to the consumer.
The marketing concept states that businesses become successful by directing all of their efforts
to satisfying the needs and wants of the customers. By offering the goods and services that
consumers want, businesses will make a profit. The marketing concept recognizes the
importance of the consumer in the buying process.
The seven marketing functions:
Marketing-information management is obtaining information needed to make sound business
decisions. For example, the Carolina Hurricanes randomly select fans to complete survey
questions about the food choices at home games.
Product/service management involves concepts and procedures necessary to obtain, develop,
maintain, and improve a product or service mix in response to market opportunities.
Risk management is preventing or reducing business loss. For example, the RBC Center
hires security guards for events.
Purchasing includes buying goods and services for use in day-to-day business operations.
For example, a stadium purchases beverages for resale.
Financing is obtaining the money needed to finance the operation of a business. This includes
bank loans and offering credit to customers. For example, the city of Charlotte develops a
financing plan for a new basketball arena.
Pricing involves determining a value to charge for goods and services. It is important to consider
competition and the amount consumers are willing and able to pay. For example, a retailer
purchases t-shirts for $6 and sells them for $12 at a concert.
Promotion is communication used to inform, persuade, or remind people about a business’s
products. For example, the Carolina Panthers use a t-shirt launcher to give away t-shirts at home
games.
Selling is determining customer needs and wants and responding to those needs and wants
through communication intended to influence purchase decisions and ensure satisfaction. For
example, Evadale purchases an Eminem t-shirt at a concert.
Distribution involves the transporting, storing and handling of goods on their way from the
manufacturer to the consumer. For example, unprepared foods must be transported in a
refrigerated truck from the manufacturer to the venue.
The four Ps of marketing:
The marketing mix, known as the four Ps, is a combination of decisions a business must make in
order to best reach its target market.
The four Ps are product, price, place and promotion.
Products include the goods and services a business will offer to its customers.
Choice of product – will the business offer a variety of products?
Packaging – does the packaging protect the product and provide necessary information about
the product?
Level of quality – what level of product quality will the business ensure?
Brand name – what brand name products will the business offer?
Warranty – will the business offer a warranty to its customers to ensure satisfaction?
Price is the amount a business charges customers for their products.
Price setting – price will be set based on product demand, cost, and competitors’ actions.
Terms – will the company only accept cash? Will the company extend credit? What type of
credit will the company offer?
Discounts – will the business offer discounts to employees? Will the business discount
merchandise at certain times of the year?
Place (distribution) is making products available at the right time and location.
A channel of distribution is the path a product takes to get from the producer to the consumer.
What specific stores will offer the products? For example, wholesaler, retailer, department,
discount, and specialty.
What method of transportation will be used to get the product from the producer to the
consumer? For example, truck, train, plane, boat, and pipeline.
How will inventory be handled and controlled? For example, physical, storing, checking, and
receiving.
Promotion is informing and reminding customers of the products available to them. Promotion
also involves persuading customers to purchase a product.
What will the message be?
When will the message be delivered?
Where will the message be delivered?
What inducements will be used to encourage customers to purchase the product?
How will the message be delivered?
A market includes the group of all potential customers who share common needs and wants, and
have the ability and willingness to buy the product. Businesses must understand who their potential
customers are in order to effectively meet their needs and wants.
Mass marketing is a single marketing plan that is used to reach all consumers.
A target market includes the group of consumers that a company desires to have as customers.
Market segmentation is dividing the entire market into smaller groups who share similar
characteristics. Segmentation allows businesses to customize products and marketing strategies.
Types of market segmentation: (4 of them)
Demographic segmentation divides the market based on personal characteristics such as age,
gender, income, ethnic background, education and occupation.
Psychographic segmentation divides the market based on values, attitudes and lifestyles. For
example, segmenting the market based on people who are marathon runners.
Geographic segmentation divides a market based on where a person lives. Geographic
segmentation can refer to local, regional, national or global markets. For example, a new stadium will
target a 100-mile radius of the potential location.
Behavioral segmentation divides the market into groups based on what they are looking for in a
product and why they buy the product. For example, purchasing Nike shoes because Michael Jordan
wears them