Download Understanding the World of Marketing

1. The Functions of Marketing
2. Understand the Marketing Concept
3. Marketing Utilities
4. Define a Target Market
5. Understand how Markets are Segmented
Students will learn:
• The meaning of marketing
• The functions of marketing
• Marketing's importance in a global economy
• The Marketing Concept
What Is Marketing?
1. Defined:
The process of developing, promoting, and
distributing products to satisfy customers’ needs
and wants.
Development
+
Promotion +
Distribution = Happy Customer
1. Products – goods and services that have monetary
value
2. Goods – things you can touch or hold
3. Services – you can’t physically touch – tasks
performed for a customer
Functions of Marketing
1. Activities that work together to get goods and
services from producers to consumers
1) Distribution
2) Financing
3) Marketing Information Management
4) Pricing
5) Product Service Management
6) Promotion
7) Selling
2. Each is essential
Distribution
1. Deciding where and to whom products need to be
sold to reach the final users.
Financing
1. Getting the money necessary to operate a business
Marketing Information Management
1. Getting information to make sound business
decisions. Usually obtained through marketing
research
For example, after a stay at a luxury hotel,
you fill out a form rating the service and
accommodations.
Pricing
1. How much to charge to maximize profits
Product Service Management
Obtaining, developing,
maintaining, and
improving a product or
a product mix in
response to market
opportunities.
Promotion
1. Communicating with potential customers to
inform, persuade, or remind them about a
business’s products
Selling
1. Planned, personalized communication that
influences purchasing decisions
The Global Economy
1. Marketers are found at every level of business.
2. Nearly all business decisions have a Marketing
element.
3. Marketing changes the:
A. Number, (increased variety)
B. Quality, (better quality because of
competition)
C. and Price (lower price because of competition)
of products that you can buy.
The Marketing Concept
1. Businesses must satisfy customers’ needs
and wants in order to make a profit.
When Henry Ford first created the Model T, he
was the only one mass producing cars. He
didn’t have to think about “The Marketing
Concept.” But, as more and more producers
started making cars, they had to think about
what customers need and want in order to
stay in business.
Click on the Model T
Ford to see Henry
Ford’s thoughts about
car color in the early
1900’s.
Imagine if, in today’s world, you
could only buy black. Many
customers would not be very
happy!
Today’s buyer wants a choice!
The Marketing Concept
1. If automobile manufactures do not give their
consumers a choice (what they want), they will not
stay in business.
2. That concept is true for all businesses.
3. Companies sell what Customers want.
Students will understand:
• The Economic Benefits of Marketing.
• The meaning of economic utility.
• The five economic utilities and how to distinguish
the four that are related to marketing.
Economic Benefits of Marketing
1. Marketing bridges the gap between you and the
maker or seller of an item
Economic Benefits of Marketing
New and Improved Products --businesses look
for opportunities to please the customer
Economic Benefits of Marketing
Lower Prices – marketing activities add value and
increase demand. When demand is high,
manufacturers can produce at a lower price. They
can sell at a lower price but increase the quantity
sold. Thus, profits are higher even though prices
are low.
Economic Benefits of Marketing
1. It adds VALUE
Added Value = Utility
There are five types of Utility:
1)
Form
2) Place
3)
Time
4) Possession
5) Information
Attributes of a product or service that make it capable of satisfying
consumers’ wants and needs.
Form Utility
Changing raw materials into goods– making and
producing things.
• Sand into glass
• Wood into paper
• Silk into fabric
Place Utility
1. Having a product where
customers can buy it.
2.It Includes:
A. Location – may be through
a catalog or at a retailer
(actual store) – or, Internet.
B. Transporting the product
to the location.
Time Utility
1. Having a product available at a
certain time of year or a convenient
time of day.
• Planning and ordering
• Time of day and week
• Time of year: holidays and seasons
Possession Utility
• The exchange of a product for some
monetary value.
Payment may
be made by:
1. Cash
2. Personal checks
3. Credit cards
4. Installments
(layaway)
Information Utility
Involves communication with the
consumer.
• Ads
• Packaging
• Signs
• Displays
• Owner’s Manuals
Which types of utility are related to
marketing?
Form utility is a
function of
production,
NOT marketing
These utilities ARE directly
related to marketing:
1. Place
2. Time
3. Possession
4.Information
Students will be able to:
• Define a market
• Describe target marketing
• Differentiate between customers and
consumers
• Use the four P’s of the marketing mix
Market
1. Market – all potential customers who have the
ability and willingness to buy
Target Marketing
1. Focusing all Marketing efforts on a very specific
group of people who you want to reach.
1. Customers – people who
buy the product
1. Consumers – people who
actually use the product
Is mom the customer or the
consumer?
What about the kids?
Marketing Mix
• Basic marketing strategies – the four P’s
1. Product
2. Place
3. Price
4. Promotion
Product Strategies
1. What product to make
2. How to package it
3. What brand name to use
4.What image to project
Place Strategies
1. How and where a product will be distributed.
Price Strategies
1. Reflect what customers are willing and able to
pay.
Promotion Strategies
1. How potential customers will be told about the
new product
2. What the message will be
3. When and where it will be delivered
4.What inducements are there to purchase it
The Marketing Mix
1. The elements are interconnected
Product
Place
Price
Promotion
The Marketing Mix – The 4 P’s
1. Contains countless alternatives.
2. Management must select a combination of
marketing mix decisions that will satisfy target
markets and achieve organizational goals.
Product &
Place
&
Price & Promotion
=
Goals
Students will:
• Understand the concept of market
segmentation.
• Define the term market segmentation.
• Understand the four methods used to segment
a market.
• Understand current demographic,
psychographic, and geographic trends
Analyzing Markets
1.Market segmentation is a way of
analyzing a market by specific
characteristics as in order to define the
target market.
Types of Segmentation:
Demographics
2. Psychographics
3. Geographics
4. Behavioral
1.
Demographics
1. Demographics – statistics that describe a
population in terms of personal
characteristics. Demographics include:
2. Age
A. Baby Boom Generation
B. Generation X
C. Generation Y
3. Gender
4. Marital Status
5. Ethnic Background
U.S. Trend – The percentage of the Caucasian
population is declining, while other ethnic
populations increase.
Psychographics
1. Involves grouping people with
similar lifestyles, as well as
shared attitudes, values, and
opinions.
A. Activities
B. Attitudes
C. Personality & Values
Music teachers,
dancers, and
other music lovers
would be one
category of people
who share
psychographic
characteristics.
VALS™ is a marketing and consulting tool that helps
businesses worldwide develop and execute more effective
strategies. The system identifies current and future
opportunities by segmenting the consumer marketplace on
the basis of the personality traits that drive consumer
behavior. VALS applies in all phases of the marketing
process, from new-product development and entry-stage
targeting to communications strategy and advertising.
Click on VALS to learn more
and to take a survey to
determine your VALS type
Geographics
1. Geographics –
Segmentation based on
where people live
A. Political Boundary
B. Climate
C. Natural Boundary
Behavioral Segmentation
1. Looking at the benefits desired by consumers,
shopping patterns, and usage rate. Market
benefits, not just the physical characteristics of a
product
Behavioral Segmentation
1. Many businesses find that the 80/20 rule applies.
2. 80 % of a company’s sales are generated by 20 % of
its loyal customers.
Mass Marketing Vs Segmentation
1. Mass marketing not as popular as it once was.
2. Niche marketing (the current trend) – markets are
narrowed down and defined with extreme
precision.