Download 3.1 - Important Information

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Essential
Standard 3.00
UNDERSTAND THE ROLE MARKETING
IN BUSINESS.
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Objective 3.01
UNDERSTAND PRINCIPLES OF MARKETING.
Topics

Functions of marketing

Importance of marketing research to the creation
or improvement of products or services

Selling prices of products and services

Classification of channels of distribution

Classification of the main types of promotion
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Functions of
marketing
Functions of Marketing

What happens during the marketing process?


Businesses are involved in the process of origin,
pricing, promotion, and distribution of products and
services. These products and services are made
available in order to meet the goals of individuals
and businesses.
Activities of marketing happen throughout the
seven functions of marketing
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Functions of Marketing
continued
Seven functions of marketing:
 Marketing-information
management
 Product/service management
 Pricing
 Place (Distribution)
 Selling
 Financing
 Promotion
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
Product/service management may include several businesses involved
with designing, developing, maintaining, improving, and obtaining
products and services in order to meet the needs of customers.

Place (Distribution) involves using the best ways for customers to locate,
obtain, and use the products and services of a business.

Selling involves communicating directly with potential customers in
order to determine and satisfy their needs and wants.

Marketing-information management involves obtaining, managing,
and using information about products and services, customers, and
competitors to improve business decision-making and the performance
of marketing activities.

Financing involves budgeting for marketing activities, securing
necessary funds for operations, and providing financial assistance to
customers.

Pricing involves determining and communicating the value of products
and services.

Promotion involves communicating information such as features and
prices about products and services to potential customers.
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Importance of marketing research to
the creation or improvement of
products or services
Marketing Research

What is marketing research?
Marketing research involves customers in order to
find solutions to problems through carefully
designed studies.

Steps in marketing research:
1.
Define the marketing problem.
2.
Study the situation.
3.
Develop a data collection procedure.
4.
Gather and analyze information.
5.
Propose a solution.
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Marketing Research
continued
Types of research studies
 Surveys
– are specific set of questions
asked to consumers
 Focus groups – are small groups of
consumers that discuss a specific
product
 Observations – record the actions of
consumers rather than questioning
them
 Experiment – is a comparison of two
controlled alternatives for consumers
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Marketing Research
continued
Similarities of products and
services

Meet the needs or satisfaction of a target market

Include a mix of the marketing elements: product,
price, promotion, and place (distribution)
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Marketing Research
continued
Differences between products and
services
Products
Services
Tangible
Intangible
Non-perishable or perishable Perishable
Separable
Inseparable
Easier to market
market
More difficult to
More control over quality
over quality
Less control
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Selling prices of
products and services
Selling Prices of Products
and Services


What factors influence the pricing of products and services?

Supply and demand

Uniqueness

Age

Season

Complexity

Convenience
Pricing formula
Selling price
=product costs + operating expenses + profit
Example: $215=67+38+100
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Selling Prices of Products
and Services continued


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What is markup? - the amount charged of the selling price to
cover the operating expenses and profit usually stated as a
percent

Selling price = product cost + markup

Example: $35+$14=$49

$35*40%=$14
What is a markdown? – a reduction from the original selling
price
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Classification of
distribution and
promotion
Classification of Channels
of Distribution

What is channel of distribution?
 The channels of distribution is how
products and services reach final
customers and the businesses involved.

How does having a channel of
distribution help businesses?
 Channels of distribution allow
businesses to adjust quantity and
assortments accessible in convenient
locations for customers and storage of
products.
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Classification of Channels
of Distribution continued
Types of channels of distribution:

Direct - Direct involves the exchange of
products and services between
producer and consumer only.
Example-Tonya makes and sells drapes to local customers.

Indirect - Indirect involves the exchange
of products and services with one or
more business and consumer.
Example-UPS delivers packages for Ann Taylor.
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Classification of the Main
Types of Promotion

How do you know when communication is
effective?



Effective communication consists of an understanding
of information between the sender and the receiver.
The sender selects a channel of communication and
the receiver indicates understanding by providing
some form of feedback.
What is the relationship between effective
communication and promotion?

Businesses use promotion to communicate with
potential customers about their products and services.
Information about products and services is encoded in
a promotional message. Promotional messages may
be delivered through advertisements and sales
representatives. Potential customers decode the
message and provide feedback by way of purchasing
or inquiring about products or services.
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Classification of the Main Types of Promotion
continued

Main types of promotion:
Personalized – Customized for individual
customer
 Mass – Communicated with many people
with a common message


What are some examples of
personalized promotion?
 visits,
telephone calls, live audio and
video Internet connections

What are some types of mass
promotion?
 advertisement,
publicity, public
relations, sales promotion
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