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CHAPTER 8
PRODUCING AND MARKETING
GOODS AND SERVICES
THE ROLE OF MARKETING
• ALL THE ACTIVITIES USED TO INSURE
THE EFFECTIVE EXHANGE OF GOODS
AND SERVICES BETWEEN BUSINESSES
AND CONSUMERS
• DEVELOP IDEA, RESEARCH WANTS AND
NEEDS, SELECT NAME, DESIGN
PACKAGING, ADVERTISING, WHERE
AND HOW TO SELL, PRICE, CUSTOMER
SERVICE, PRODUCT IMPROVEMENTS
THE ROLE OF MARKETING
• SATISFYING EXCHANGES BETWEEN
BUSINESSES AND CUSTOMERS
• MARKETERS HELP MATCH THE
PRODUCTION AND CONSUMPTION
DECISIONS
MARKETING FUNCTIONS
1. PRODUCT/SERVICE PLANNING-GATHER INFO AND TEST IDEAS
2. PURCHASING--IDENTIFY AND
OBTAIN NEEDED GOODS AND
SERVICES
3. FINANCING--AVAILABLE TO HELP
SUPPORT PURCHASES AND SALES
4. DISTRIBUTION--GETTING PRODUCT
TO CUSTOMERS
5. PRICING--SET PRICES AND PAYMENT
METHODS
MARKETING FUNCTIONS
6. RISK MANAGEMENT--SAFETY IN
PRODUCTS; REDUCE BUSINESS RISK
7. MARKETING INFORMATION
MANAGEMENT--OBTAIN AND
ORGANIZE INFORMATION TO MAKE
DECISIONS
8. PROMOTION--COMMUNICATING
WITH CUSTOMES TO ENCOURAGE
PURCHASES
IMPACT OF MKTG--INC. STANDARD OF
LIVING, MADE MORE AWARE, CHOICES
EFFECTIVE MARKETING
• MARKETING PHILOSOPHY--1)
IDENTIFY CUSTOMERS 2) DEVELOP A
PRODUCT TO SATISFY CUSTOMERS 3)
COMPLETE ACTIVITIES AT A PROFIT
• MARKETING CONCEPT--CONSIDER
NEEDS OF CUSTOMER WHEN
PLANNING, PRICING, DISTRIBUTING,
AND PROMOTING A PRODUCT
A MARKETING STRATEGY
• TARGET MARKET--CLEARLY
IDENTIFIED GROUP OF CONSUMERS
WITH NEEDS THE BUSINESS WANTS
TO SATISFY
• MARKETING MIX--(THE 4 P’s)
– PRODUCT
– PLACE
– PRICE
– PROMOTION
PRODUCT DEVELOPMENT
STEP 1--DEVELOP A NEW PRODUCT IDEA
STEP 2--TEST THE PRODUCT WITH
PROSPECTIVE CUSTOMERS
STEP 3--CONSTRUCT A PRODUCT MODEL
AND TEST IT
STEP 4--DESIGN PRODUCTION AND
MARKETING PROCEDURES
STEP 5--DEVELOP BUDGETS AND
FORECAST SALES
STEP 6--PREPARE FACILITIES,
EQUIPMENT, AND PERSONNEL
PLANNING DISTRIBUTION
CHANNELS
• CHANNEL OF DISTRIBUTION--PATH
A PRODUCT TRAVELS FROM
PRODUCER TO CONSUMER
• DIRECT CHANNEL--FROM PRODUCER
TO CONSUMER
• INDIRECT CHANNELS--MOVE
THROUGH MIDDLE FIRMS (RETAILERS,
WHOLESALERS)
CHARACTERISTICS OF
EFFECTIVE DISTRIBUTION
• DIFFERENCES IN QUANTITY--ADJUSTS
FROM LARGE AMOUNT PRODUCED TO SMALL
QUANTITY PURCHASED
• DIFFERENCES IN ASSORTMENT--
ACCUMULATES MANY VARIETIES OF PRODUCTS IN
ONE PLACE
• DIFFERENCES IN LOCATION--BRINGS
PRODUCTS FROM ALL OVER WORLD TO
CONVENIENT PLACES FOR CUSTOMES
• DIFFERENES IN THE TIME--ALLOW MFGRS
TO MAXIMIZE EFFICIENCY WHILE DELIVERING
PRODUCTS TO CONSUMERS WHEN WANTED
THE ROLE OF PRICING
• PRICE DETERMINES OUR
SATISFACTION
• GOALS--COVER COSTS AND
GENERATE A PROFIT, VIEWED AS A
GOOD VALUE, NOT PUT AT
COMPETITIVE DISADVANTAGE
• OBJECTIVES--MAXIMIZE PROFITS,
INCREASE SALES, MAINTAIN AN IMAGE
FACTORS THAT INFLUENCE
PRICE
• SUPPLY AND DEMAND
• QUANTITY OF PRODUCT PURCHASED
• IF PRODUCT IS FRAGILE OR REQUIRES
SPECIAL HANDLING
• NUMBER OF BUSINESSES IN CHANNEL
OF DISTRIBUTION
• THE AMOUNT OF ADVERTISING AND
COMMUNICATIONS NEEDED TO
INFORM CONSUMERS
PROMOTION FOR
SUCCESSFUL MARKETING
• MORE THAN ADVERTISING
• INFORM CUSTOMERS AND PURSUADE
THEM TO CHOOSE PRODUCT
• REINFORCES PURCHASE DECISION
• MEDIA ADVERTISING, COUPONS,
CONTESTS, FREE SAMPLES, PERSONAL
SELLING
STEPS IN SELLING PROCESS
• PREAPPROACH--GATHER INFO
• APPROACH--CONTACT, DEVELOP
RELATIONSHIP
• DEMONSTRATION--PRESENT PRODUCT
• QUESTIONING--GET INFO TO
CUSTOMER
• CLOSE--ASK FOR ORDER
• FOLLOW-UP--CONTINUE CONTACT