Download The Basics of Marketing

THE BASICS
OF MARKETING
4.1 Changes in Today’s Marketing
4.2 Planning a Marketing Strategy
4.3 Deciphering Consumers and
Competitors
4.4 Marketing’s Role in Various
Businesses
© South-Western Publishing
Changes in
Today’s Marketing
GOALS for Lesson 4.1
Explain how marketing today differs
from the way things were done in the
past.
Show why understanding customer
needs is crucial, even with a superior
product.
© South-Western Publishing
Recognizing How
Marketing Has Changed
Understanding the Differences
 From few to many
 Earliest use was to move products from producer to
consumer.
 From independent to integrated
 Much more effective
 From problems to opportunities
 From expense to investment
 Reducing Marketing efforts when faced with
financial problems is the wrong answer.
© South-Western Publishing
Marketing Functions
Product/Service Management
Distribution
Selling
Marketing-Information management
Financing
Pricing
Promotion
© South-Western Publishing
Business Functions
Production
Operations
Accounting and Finance
Management and Administration
Marketing
© South-Western Publishing
Marketing Concept
Using the needs of customers as the
primary focus during the planning,
production, distribution, and promotion
of a product or service.
© South-Western Publishing
Coming To Grips with
the Marketing Concept
Reliable Auto Service – read pg. 89
Dee’s Designs – read pg. 90
Focus on customer needs
Must use the Marketing Concept..
 Huh? …using the needs of customers as
the primary focus during the Planning,
Pricing, Distribution, and Promotion of a
product or service. Got it?
© South-Western Publishing
What Went Wrong
1. They were concerned only about the
product or service
2. They believed that they knew what
customers would buy
3. They did not study the market
4. They failed to use a variety of
marketing tools available to them
© South-Western Publishing
Important points to
remember…
The primary focus of the MARKETING
CONCEPT is the needs of the
customer. Businesses often fail
because they don’t understand and use
the MARKETING CONCEPT.
Marketers are constantly looking for
new Markets.
© South-Western Publishing
PLANNING A
MARKETING STRATEGY
GOALS for Lesson 4.2
 Understand how the marketing concept
transforms business planning.
 Explain the importance of market
segments and market opportunity analysis.
 Discuss how businesses develop the right
marketing mix.
© South-Western Publishing
Putting Marketing
Up Front
Planning that identifies how a company
expects to achieve its goals is known as a
strategy.
© South-Western Publishing
How Does the Marketing
Concept Affect Planning?
Without the Marketing Concept
1. Develop a product.
2. Decide on marketing activities.
3. Identify potential customers.
With the Marketing Concept
1. Conduct research to identify potential customers and
their needs.
2. Develop a marketing mix (product, distribution, price,
promotion) that meets specific customer needs.
© South-Western Publishing
Understanding
the Customer
Identifying customer needs (1st!)
Satisfying customer needs
© South-Western Publishing
Understanding the
Customer
Identifying Customer Needs
 Many customers are not sure of their needs
or may have conflicting needs
 Customers may have needs, but they
typically have limited amounts of money
available to satisfy those needs
 Individuals and groups of consumers might
have different perceptions on what
products will meet their needs
© South-Western Publishing
Two Views of
Consumers
Customers are all alike and can be
influenced to buy what a business
offers.
Customers are quite different and they
select products and services
to meet their unique needs.
© South-Western Publishing
Understanding the
Customer
Satisfying Customer Needs
 Market Research leads to Market
Segments (groups of similar consumers
within a larger market)
 Market Opportunity Analysis – studying and
prioritizing market segments to locate the
best potential based on demand and
competition.
© South-Western Publishing
Planning the Offering
Creating the Right Mix
Product development
Distribution decisions
Pricing products and services
Planning promotion
© South-Western Publishing
Product Development
Making your brand different and better
than those offered by competitors.
 Types of parts used
 Color, size, operation, accessories
 Services that come along with the product
(guarantees or warranties)
 Packaging
© South-Western Publishing
Distribution Decisions
Important impact on customer
satisfaction by making the product
available (convenience)
 Channels of distribution must be efficient
and effective
 Minimal exchanges between producer and
consumer
 Manufacturers must rely on wholesalers
and retailers
© South-Western Publishing
Pricing Products and
Services
 Businesses must develop specific procedures
to set prices that are competitive and allow
the business to make a profit
 What is the pricing objective (increase sales,
maximize profit, similar pricing)
 Calculating the price (make sure to include all
expenses)
 Discounts, markdowns, coupons, rebates,
financing
© South-Western Publishing
Planning Promotion
Effective Promotions must have an
impact on the consumer
 Types of promotions – advertising, personal
selling, sales promotion, visual display, and
publicity
 Each method has different costs and
reaches different amounts of people
 Used to communicate the value and
benefits of the product
© South-Western Publishing
Combining
Parts of the
Marketing Mix
 Product that offers
choices
 Distribution that
provides
convenience
 Satisfied customers
 Price that gives
value
 Promotion that aids
decision-making
Distribution
Product
Satisfied
customers
Price
Promotion
© South-Western Publishing
In Groups
Create an effective marketing mix for
an Auto Parts Store. You should
consider the four parts of the
marketing mix and consider how
each of those parts affect one
another. Each plan should have
reasons for the marketing choices
that were made.
© South-Western Publishing
DECIPHERING CONSUMERS
AND COMPETITORS
GOALS for Lesson 4.3
Detail the stages of consumer decisionmaking.
Understand how businesses should
respond to various types of competition.
© South-Western Publishing
Stages in Consumer
Decision-Making
Recognize – consumer, “a need exists”
Identify – interest leads to identifying
products/services that relate
Evaluate – check your choices
Decide – select, gather more info., or do nothing
Assess – how much satisfaction?
© South-Western Publishing
GOOD STUFF……..
Most of us use this process – we don’t
really choose in a unique manner.
Remember the order…R.I.E.D.A.
The process causes decisions being
made to become routine.
What can VALUE look like?
 Higher quality, more service, lower prices…
© South-Western Publishing
Stages in Consumer
Decision-Making
Recognizing a need
Identifying alternatives
Evaluating choices
Making a decision
Determining satisfaction
© South-Western Publishing
Responding
to Competition
 #1 Intense competition – in a
market with pure competition, or
oligopolistic, how do I differentiate
myself? Coke vs. Pepsi? Price?
Promotion? Distribution?
© South-Western Publishing
Responding to comp.#2
#2 Limited competition – monopoly?
Keep competitors out, protect location,
keep uniqueness
 Customers of a monopoly can become
dissatisfied (due to lack of choice).
 Avoid dissatisfaction by using…THE
MARKETING CONCEPT!
© South-Western Publishing
Responding to comp.#3
#3 Monopolistic competition- need
clearly identified differences in
product/service.
 Focus on specific groups and identify their
needs.
© South-Western Publishing
MARKETING’S ROLE IN
VARIOUS BUSINESSES
GOALS for Lesson 4.4
Explain the various marketing roles
of different types of businesses.
Examine how marketing is useful
for organizations other than
businesses.
Differentiating
Business Roles
 Producers and manufacturers – “Product”
and “Distribution” important
 Channel members – financing, distribution,
final pricing decisions, promotion
 Service businesses – don’t normally use
“Distribution”…why not?
 Hard to determine the appropriate price or to
compare services…why?
Markups and Margins
 Markup – difference between the price a
business pays for a product and the price it
plans to sell the product for.
 Gross Profit Margin is the difference between
the price a product sells for and the amount a
business pays for it.
 Retailer pays $1 for a product, and sells it for
$1.50…
 Markup is .50/1.00 = 50%
 Gross Profit Margin is .50/1.50 = 33%
Marketing By
Non-Business
Groups
 Museums
 Libraries
Mistakes made frequently include…
 Symphonies
1) improper development of
 Athletic
“The Marketing Plan”
teams
2) Emphasized Promotion
 Churches
3) Treat people as if they have
 Clubs
the same wants and needs.