Download Intro to Business, 7e

Intro to Business, 7e
CHAPTER 10
Marketing
10-1 Marketing Basics
10-2 Develop Effective Products
and Services
10-3 Price and Distribute Products
10-4 Plan Promotion
© 2009 South-Western, Cengage Learning
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Intro to Business, 7e
10-1 Marketing Basics
Goals
 Define important marketing concepts.
 Identify the steps in a marketing strategy.
 Describe the consumer decision-making
process.
© 2009 South-Western, Cengage Learning
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Intro to Business, 7e
Chapter 10
Key Terms
 marketing
 marketing strategy
 target market
 marketing mix
 marketing
orientation
 final consumers
 business consumers
 consumer decisionmaking
 process
 buying motives
© 2009 South-Western, Cengage Learning
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Intro to Business, 7e
Chapter 10
UNDERSTAND
MARKETING
Marketing activities
Marketing businesses
Marketing functions
© 2009 South-Western, Cengage Learning
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Intro to Business, 7e
Chapter 10
Marketing
Functions
© 2009 South-Western, Cengage Learning
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Intro to Business, 7e
Chapter 10
Checkpoint >>
Define marketing and the seven marketing functions.
Answer
 Marketing is an organizational function and a set of processes
for creating, communicating, and delivering value to
customers and for managing customer relationships in ways
that benefit the organization and its stakeholders.
 The seven marketing functions include product and service
management, distribution, selling, marketing information
management, financial analysis, pricing, and promotion.
© 2009 South-Western, Cengage Learning
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Intro to Business, 7e
Chapter 10
MARKETING STRATEGY
Marketing planning
Develop a successful marketing
strategy
 Identify a target market
 Create a marketing mix
© 2009 South-Western, Cengage Learning
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Intro to Business, 7e
Chapter 10
TARGET MARKET
Specific group of consumers who have
similar needs and wants
 Proctor & Gamble
 http://www.pg.com/en_US/index.shtml
© 2009 South-Western, Cengage Learning
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Intro to Business, 7e
Chapter 10
http://www.esmalloffice.com/SBR_templ
ate.cfm?DocNumber=PL12_2000.htm
© 2009 South-Western, Cengage Learning
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Intro to Business, 7e
Chapter 10
MARKETING MIX
PRODUCT- includes the basic (or simplest form) product,
features, options, brand name, packaging guarantee/warranty,
PRICE- the $ a customer must pay for a product or service
PLACE- distribution (channels of distribution) and placement
PROMOTION- promotion, personal selling, and advertising
© 2009 South-Western, Cengage Learning
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Intro to Business, 7e
Chapter 10
Checkpoint >>
What are the two steps in developing a marketing
strategy?
Answer
 1. Identify your target market
 2. Develop your marketing mix.
© 2009 South-Western, Cengage Learning
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Intro to Business, 7e
Chapter 10
UNDERSTAND
CUSTOMERS
Consumer decision-making (next slide)
Buying motives
 Emotional
 Purchases based on feelings, beliefs, and
attitudes
 Rational
 Purchase decisions guided by facts and logic
© 2009 South-Western, Cengage Learning
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Intro to Business, 7e
Chapter 10
STEPS IN THE CONSUMER
DECISION-MAKING PROCESS
1.
2.
3.
4.
5.
Recognize a need.
Gather information.
Select and evaluate alternatives.
Make a purchase decision.
Determine the effectiveness of the
decision.
© 2009 South-Western, Cengage Learning
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Intro to Business, 7e
Chapter 10
Assessment page 242>>
1-3, and 4 or 5
Then read Chapter 10-2 starting on
page 243 and complete questions on
page 248 (1-3, and 4 or 5)
© 2009 South-Western, Cengage Learning
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Intro to Business, 7e
10-2 Develop Effective
Products and Services
Goals
 Justify the importance of marketing research.
 Identify the components of a product.
 Describe how services differ from products.
© 2009 South-Western, Cengage Learning
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Intro to Business, 7e
Chapter 10
Key Terms
 marketing research
 product
 services
 intangible
 inseparable
 perishable
 heterogeneous
© 2009 South-Western, Cengage Learning
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Intro to Business, 7e
Chapter 10
CREATE AND
IMPROVE PRODUCTS
Totally new products
Major improvements in existing
products
Minor improvements in existing
products
© 2009 South-Western, Cengage Learning
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Intro to Business, 7e
Chapter 10
PLAN MARKETING
RESEARCH
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.
© 2009 South-Western, Cengage Learning
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Intro to Business, 7e
Chapter 10
TYPES OF RESEARCH
STUDIES
Secondary ResearchAnalyzing existing information gathered for another
purpose and using it to solve a current problem
Primary ResearchStudies carried out to gather new information
specifically directed at a current problem
(continued on following slide)
© 2009 South-Western, Cengage Learning
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Intro to Business, 7e
Chapter 10
TYPES OF RESEARCH
STUDIES (Primary Research)
Surveys
Focus groups
Observations
Experiments
© 2009 South-Western, Cengage Learning
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Intro to Business, 7e
Chapter 10
Check out these examples…
http://www.fastcompany.com/magazine/
05/elab.html
http://www.youtube.com/watch?v=oBai
KsYUdvg
http://online.wsj.com/article/SB1219275
08211958397.html
© 2009 South-Western, Cengage Learning
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Intro to Business, 7e
Chapter 10
Checkpoint >>
List the steps in a marketing research study.
Answer
 The steps in marketing research are to define the marketing
problem, study the situation, develop a data collection
procedure, gather and analyze information, and propose a
solution.
© 2009 South-Western, Cengage Learning
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Intro to Business, 7e
Chapter 10
PRODUCT PLANNING
Parts of a product





Basic Product
Product Features (Options)
Brand Name
Packaging
Guarantee or Warranty
© 2009 South-Western, Cengage Learning
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Intro to Business, 7e
Chapter 10
PRODUCT PLANNING
Product planning procedures






Idea development
Idea screening
Strategy development
Production and financial planning
Limited production and test marketing
Full-scale production
© 2009 South-Western, Cengage Learning
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Intro to Business, 7e
Chapter 10
Checkpoint >>
What are the components of a product?
Answer
 Products are everything businesses offer to customers and are
composed of the basic product, product features, its brand
name and packaging, and sometimes a guarantee or warranty.
© 2009 South-Western, Cengage Learning
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Intro to Business, 7e
Chapter 10
SERVICES
Intangible
 No tangible form
Inseparable
 Consumed at the time they are produced
Perishable
 Cannot be stored for later use
Heterogeneous
 Differences in the type and quality of
services provided
© 2009 South-Western, Cengage Learning
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Intro to Business, 7e
Chapter 10
Checkpoint >>
In what ways are services different from products?
Answer
 Products are tangible and may be nonperishable; it is
generally easier to control the quality and marketability of
these items.
 Services, however, are intangible, more difficult to market,
and perishable.
© 2009 South-Western, Cengage Learning
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Intro to Business, 7e
10-3 Price and Distribute
Products
Goals
 Discuss how the selling price of a product is
calculated.
 Differentiate between a direct and an indirect
channel of distribution.
© 2009 South-Western, Cengage Learning
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Intro to Business, 7e
Chapter 10
Key Terms
price
distribution
channel of distribution
channel members
© 2009 South-Western, Cengage Learning
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Intro to Business, 7e
Chapter 10
VALUE AND PRICE
Buyers usually want to pay the lowest
price possible.
Sellers want to charge the highest price
possible.
© 2009 South-Western, Cengage Learning
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Intro to Business, 7e
Chapter 10
PRICING FACTORS
Supply and demand
Uniqueness
Age
Season
Complexity
Convenience
© 2009 South-Western, Cengage Learning
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Intro to Business, 7e
Chapter 10
PRICE A PRODUCT
 Selling price
 Product costs
 Operating expenses
 Profit
 Gross margin
Gross
Selling
Product
=
+
Margin
price
costs
Selling
Product Operating
=
+
+ Profit
price
costs
expenses
© 2009 South-Western, Cengage Learning
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Intro to Business, 7e
Chapter 10
PRICE A PRODUCT
Markup
Markdown
© 2009 South-Western, Cengage Learning
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Intro to Business, 7e
Chapter 10
Checkpoint >>
What is the formula for calculating the selling price of a
product?
Answer
Selling price = Product cost + Operating expenses + Profit.
© 2009 South-Western, Cengage Learning
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Intro to Business, 7e
Chapter 10
CHANNELS OF
DISTRIBUTION
Need for distribution channels




Differences in quantity
Differences in assortment
Differences in location
Differences in timing
Channels and channel members
© 2009 South-Western, Cengage Learning
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Intro to Business, 7e
Chapter 10
Checkpoint >>
What is the difference between a direct and an indirect
channel of distribution?
Answer
 In a direct channel of distribution, products move directly
from the producer to the consumer.
 In an indirect channel, others may participate in the
movement of products from the producer to the consumer,
such as transportation services and retailers.
© 2009 South-Western, Cengage Learning
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Intro to Business, 7e
Chapter 10
Reinforcements
Page 242
Page 247
Page 248
Page 254
(1-3 and 4 or 5)
Ethics (1-3)
(1-3)
(1-2 and 3 or 4)
© 2009 South-Western, Cengage Learning
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Intro to Business, 7e
10-4 Plan Promotion
Goals
 Justify the importance of communication in
marketing.
 Identify and describe the common types of
promotion.
© 2009 South-Western, Cengage Learning
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Intro to Business, 7e
Chapter 10
Key Terms
Promotion ~ any form of communication use to inform,
persuade, or remind.
Effective communication ~ exchange of information
so there is common understanding by all participants.
Personal selling ~ direct, individualized communication
withy prospective customers to assess their needs and assist them in
satisfying those needs with appropriate products and services.
Advertising ~ any paid form of communication through
mass media directed at identified consumers to provide
information and influence their actions.
© 2009 South-Western, Cengage Learning
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Intro to Business, 7e
Chapter 10
COMMUNICATION
The communication process
Communicating through promotion – p.256
How does identifying a target market
improve promotion communications?
© 2009 South-Western, Cengage Learning
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Intro to Business, 7e
Chapter 10
Components of Effective Communication
© 2009 South-Western, Cengage Learning
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Intro to Business, 7e
Chapter 10
Checkpoint >>
How does identifying a target market improve promotion
communications?
Answer
 Communication can be developed and directed more
specifically if a target market is identified.
© 2009 South-Western, Cengage Learning
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Intro to Business, 7e
A QUESTION OF ETHICS
on page 258
Chapter 10
 The Price of Success
 A MICROSOFT CASE STUDY



http://www.nytimes.com/2007/09/17/technology/17cndsoft.html?ex=1347681600&en=d16802a6603d512f&ei=5088&partner=rssnyt&emc=rss
http://www.computerworld.com/s/article/9103578/For_Bill_Gates_antitrust_fight_was_a_perso
nal_crucible
http://en.wikipedia.org/wiki/Bill_Gates
© 2009 South-Western, Cengage Learning
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Intro to Business, 7e
Chapter 10
PROMOTION
Personalized promotion
 Direct communication w/ customer
 Tailors information for that customer
 a.k.a. Personal Selling
Mass promotion
 Communicates with many people at the same time
 Common message
 More info on next slide
© 2009 South-Western, Cengage Learning
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Intro to Business, 7e
Chapter 10
PROMOTION
Mass Promotion (continued)
 Advertising~ pd communication through mass media to
influence the public
 Publicity~ non-paid promotion
 Public Relations~ ongoing program of pd and non-pd
communications. Planned to favorably influence public
opinion
 Sales Promotions ~activities and materials designed
to reinforce a company’s brand or image
© 2009 South-Western, Cengage Learning
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Intro to Business, 7e
Chapter 10
PROMOTION
Mass personalization
 Combines the advantages of personal
selling and mass promotion
 Begins as mass promotion and then invites
prospective customers to call, write, or go
online, for a more personal analysis of their
needs.
© 2009 South-Western, Cengage Learning
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Intro to Business, 7e
Chapter 10
Checkpoint >>
Describe the advantages and disadvantages of the
major types of promotion.
Answer
 Personalized promotion allows the provider to meet customers and
identify customer needs.
 It is, however, the most expensive type of promotion.
 Mass promotion reaches a larger target market and is much less
expensive.
 It does not, however, provide for individualized service, and sales
(results) are often not immediate.
© 2009 South-Western, Cengage Learning
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Intro to Business, 7e
Reinforcement
10-4
Page 259 (1, 2, and 4)
AND Chapter Review
Page 260
1-21 and 2 from 22-27
© 2009 South-Western, Cengage Learning
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