2 Objectives:Describe market shareDefine and analyze a target marketExplain the economic value and benefits of marketingState the marketing concept
3 Marketing Is All Around Us What is marketing? Everyday we are subjective to thousands of marketing messages.In the United States, it is rare to be far from an ad of some sort. A passing hiker in a national park might be wearing a T-shirt with a corporate logo. A sign on the side of a country road could announce fresh eggs for sale. In a mall or a major city, the marketing is much more intense. Everywhere you look, you see signs, brands, and ads.Promotion is only one aspect of marketing. How would you define marketing and all the activities that fall under its umbrella?As students offer examples of products, record these examples in a cluster diagram on the board. Ask students if they can draw any conclusions about marketing from the diagram. For example, do they think that ads on hot air balloons are effective? What kinds of ads do they think might be featured on the balloons?
4 Defining MarketingMarketing is the process of developing, promoting, and distributing products to satisfy customers’ needs and wants.You already know a lot about marketing because it is all around you. You have been a consumer for many years, and you have made decisions about products you liked and did not like. As you study marketing, you will analyze what businesses do to influence consumers’ buying decisions. That knowledge will help you begin to think like a marketer.Marketing is the process of developing, promoting, and distributing products to satisfy customers’ needs and wants.Note that marketing is a process. This means it is ongoing, and it changes. As a marketer, you will need to keep up with trends and consumer attitudes. The products, ideas, or services you develo9p and the way you price, promote, and distribute them should reflet these trends and attitudes.
5 Products Include Goods & Services: Things that you can touch or hold in your hand. These are tangible items.Services:Things you can’t physically touch. Services are performed for a customer.Goods are tangible items that have monetary value and satisfy your needs and wants.Intangible items that have monetary value and satisfy your needs and wants are services.
6 Examples of Goods: Car Clothes Jewelry Electronics Food & Beverages ToolsCD’s
7 Examples of Services: Car Wash Dry Cleaning Massage Hair Cut Movie TheatresAmusement ParksDog WalkerGardener
8 Marketplace The commercial environment where exchange is made. ExamplesStoresInternet (E bay; store sites)Street vendorsT.V (shopping networks)After goods are created, they are sent to the marketplace where they are made available to consumers. The marketplace is the commercial environment where exchanges are made.
9 Foundations of Marketing Business, Management, EntrepreneurshipCommunication and Interpersonal SkillsEconomicsProfessional DevelopmentBusiness, Management, Entrepreneurship: Understanding the basics of business, management, and entrepreneurial concepts that affect business decision making.Communication and Interpersonal Skills: Understanding concepts, strategies, and systems needed to interact effectively with others.Economics: Understanding the economic principles and concepts that are basic to marketing.Professional Development: Understanding concepts and strategies needed for career exploration, development, and growth.
10 Functions of Marketing All the activities that you encounter daily can be classified into the 7 functions of marketing:Distribution (Channel Management)FinancingMarketing-Information ManagementPricingProduct/Service ManagementPromotionSelling
11 Distribution (Channel Management) Involves deciding where and to whom products will be sold in order to reach final users or consumers.The logistics of physically moving and sorting the goods.TruckPlaneTrainShipDistribution is the process of deciding how to get goods in customers’ hands. Physically moving and storing goods is part of distribution planning. The main methods of transportation are by truck, rail, ship, or air.Some large retail chains store products in central warehouses for later distribution. Distribution also involves the systems that track product so that they can be located at any time.
12 FinancingGetting the necessary money to pay for the operation of a business.CashLoanCredit cardsPartnersFinancing is getting the money that is necessary to pay for setting up and running a business. Business owners often obtain bank loans to start a new business. Some also form corporations and sell shares of the business or stock. Financing also involves decisions about whether to offer credit to customers. Most retailers offer customers payment options such as MasterCard or Visa, while some other stores offer their own credit services.
13 Marketing Information Management Information obtained through market research.SurveysTelephone interviewsQuestionnairesGood business and marketing decisions rely on good information about customers, trends, and competing products. Gathering this information, storing it, and analyzing it are all part of marketing information management. Collecting information is done on a continual basis and through special marketing research studies. This is what marketers do to find out about customers, their habits and attitudes, where they live, and trends in the marketplace. Have you ever been asked to complete a questionnaire about the service at a restaurant or other type of business? If so, you have participated in marketing research. Companies conduct research so they can be successful at marketing and selling their product.
14 PricingDeciding how much to charge for goods and services in order to maximize profits.Pricing decisions dictate how much to charge for goods and services in order to make a profit. Pricing decisions are based on costs and on what competitors charge for the same product or service. To determine a price, marketers must also determine how much customers are willing to pay. Other pricing goals include gaining market share and achieving a certain return on an investment.
15 Product/Service Management Developing, maintaining and improving a product or product mix in response to market opportunities.Product/service management is obtaining, developing, maintaining, and improving a product or a product mix in response to market opportunities. Marketing research guides product/service management toward what the consumer needs and wants.
16 PromotionCommunicating with potential customers to inform, persuade, remind them about a business’s product.Promotion is the effort to inform, persuade, or remind potential customers about a business’s products or services. Television and radio commercials are forms of promotion. This type of promotion is called advertising. Promotion is also used to improve a company’s public image. A company can show that it is socially responsible by recycling materials or cleaning up the environment. Promotion concepts and strategies are used to achieve success in the marketplace.Promotion
17 Selling Providing customers with goods and/or services they want Selling provides customers with the goods and services they want. This includes selling in the retail market to you, the customer, and selling in the business-to-business market to wholesalers, retailers, or manufacturers.Selling techniques and activities include determining client needs and wants and responding through planned, personalized communication. The selling process influences purchasing decisions and enhances future business opportunities.
18 Marketing Functions Producers Consumers Financing Pricing Marketing-Information ManagementProduct/Service ManagementPromotionDistributionSellingProducersConsumersHere’s a few graphic organizers to help you review the concepts presented…
19 Marketing-Information Management SellingFinancingProfessional DevelopmentEconomicsDistributionBusiness, Management, EntrepreneurshipCommunication, Interpersonal SkillsPricingThe Whole Picture of the Foundations of Marketing (Inner Circles) and the Functions of Marketing (Outer Circle).Turn to page 2- “Toy Story” :Each holiday season, a toy emerges from obscurity to become the holiday item that everybody wants. Poo-chi, Furby, Tickle Me Elmo, Beanie Babies, and Cabbage Patch dolls are just a few examples of this phenomenon. You think you have an idea for a unique toy that could be the next big thing. You know marketing is essential to your toy’s success.What functions of marketing must you consider to make your toy the next holiday phenomenon?Give examples of why.Product/ Service ManagementPromotion
20 Marketing is All Around Us Intro to MarketingDAY 2
21 Economic UtilitiesWhy It's ImportantBy understanding the benefits of marketing, you will see how the functions of marketing add value to products. You will also see how marketing activities lead to lower prices and new and improved products.
22 Economic Benefits of Marketing New & Improved ProductsLower PricesAdded ValueMarketing plays an important role in the economy because it provides the means for competition to take place. In a competitive marketplace, businesses try to create new or improved products at lower prices than their competitors. Those efforts force them to be efficient and responsive to consumers. In addition, businesses look for ways to add value to a consumer’s shopping experience. Let’s look at the economic benefits of marketing to the economy and to consumers.
23 New & Improved Products Example: Personal computers have become smaller, more powerful, and less expensive through competition between makers.New and Improved Products: New and improved products are another result of increased competition generated by marketing. As businesses continue to look for opportunities to better satisfy customers’ wants and needs, the result is a larger variety of goods and services. For example, personal computers have gotten smaller, lighter, more powerful, and less expensive. As more people use computers, this market continues to grow.Lead a discussion in which students are asked to make inferences about the problems Dutch Boy’s new container addresses and for which it offers solutions. Ask students to list three new and improved products they have seen marketed lately. Answers will vary; students should provide specific examples of the innovations and improvements publicized by a particular producer.
24 Lower PricesQuality Fixed CostProduced Per Unit10, $2.00($20,000 ÷ 10,000)20,($20,000 ÷ 200,000)Lower Prices: Marketing activities add value to products and increase demand. When demand is high, manufacturers can make products in larger quantities, which reduces the unit cost of each product. This is because the fixed costs (such as rent on a building) remain the same whether the company produces 10 units or 10,000 units. When a company produces a larger quantity of a product, it spends less per unit on fixed costs. The company can charge a lower price per unit, sell more units, and make more money. Shown is an example using a fixed cost of $20,000.In addition, when products become popular, more competitors enter the marketplace. To remain competitive, marketers find ways to lower their prices. Look at the DVD market for some examples of this phenomenon. DVD players were introduced in Since then, there has been an explosion in the sales and rentals of DVDs and DVD players. Combination DVD/CD/MP3 players were very costly products when they were introduced on the market, but now they can be purchased for less than $100.
25 Added ValueAdded Value: Economic utilities reflect the value that producers and marketers add to raw materials when they make them into products and offer them for sale to the public.
26 Economic UtilitiesThe functions of marketing add value to a product. That added value in economic terms is called utility.
27 Five Economic Utilities Form UtilityPlace UtilityTime UtilityPossession UtilityInformation Utility
28 Form UtilityInvolves changing raw materials or putting parts together to make them more useful. It deals with making, or producing things.Form utility involves changing raw materials or putting parts together to make them more useful. In other words, it deals with making or producing things.Although form utility is not directly related to marketing, much of what goes into creating new products, such as marketing research and product design, makes it an integral part of the marketing process.Example: The parts of a lounge chair— the wood frame, the fabric, the glue and nails, and the reclining mechanism—are less useful by themselves. Putting them together adds form utility.
29 Place Utility Having a product where customers can buy it. Example: Selling directly to the customer through catalogs.Place utility involves having a product where customers can buy it. Businesses study consumer shopping habits to determine the most convenient and efficient location to sell products.Some businesses use a direct approach by selling their products through catalogs, and other businesses rely on retailers to sell their products. The Internet offers even more options to businesses that want to sell their products directly to their customers without the use of any intermediaries.
30 Time UtilityHaving a product available at a certain time of the year or a convenient time of day.Example: Retailers offer large supplies of backpacks in the late summer, near the beginning of the school year.Time utility is having a product available at a certain time of year or a convenient time of day. For example, supermarkets and other food stores offer convenient shopping hours or they are open 24 hours a day. Retailers often have extended shopping hours during the busiest shopping season of the year, from Thanksgiving till Christmas.Very few manufacturers do anything in real time. Fashion retailers buy at least six months to one year ahead of a season. Magazines are produced six months prior to publication, requiring editors to celebrate the Fourth of July in December. Textbooks are traditionally published to be available the spring before the fall of their intended use.
31 Possession UtilityThe exchange of a product for some monetary value. In the sales transaction, the customer pays (with cash, check, credit card or debit card) and takes possession of it.How do you come into possession of the items that you want? You generally by them for a price. The exchange of a product for money is possession utility. Retailers may accept alternatives to cash, such a checks, debit or credit cards, in exchange for their merchandise. They may even offer installment or layaway plans. Everyone of these options adds value to the product being purchased.Example: Taking credit cards and checks rather than just cash enables customers to buy products.
32 Information Utility Communication with the consumer. To encourage sales, retailers may feature information about products and special offers and inform potential customers through ads, signs or displays.Example: Salespeople explain features of products.Example: Packaging explains qualities and uses.Example: Advertising informs consumers about products.Information utility involves communication with the consumer. Sales people provide information to customers by explaining the features and benefits of products. Displays communicate information too. Packaging and labeling inform consumers about qualities and uses of a product. The label on a frozen food entrée will tell you the ingredients, nutritional information, directions for preparation, and any safety precautions needed.Advertising informs consumers about products, tells where to buy products, and sometimes tells how much products cost.Many manufacturers provide owners’ manuals that explain how to use their products. Businesses have Web sites on the Internet where they provide detailed information about their companies and their products.
33 Marketing is All Around Us Intro to MarketingCareers in Marketing
34 Careers in MarketingCareers in Marketing include all the activities required to plan, develop, promote and distribute goods and services to consumers.Marketing activities account for 1:3 jobs in the U.S.
35 Careers in Marketing Employment Trends*: Employment in Marketing & Sales is projected to increase 20.6%Employment in service-related industries is expected to increase 33.4%*Bureau of Labor Statistics
36 Benefits of a Marketing Career Careers in MarketingBenefits of a Marketing CareerThe opportunity to make an above-average income.Most jobs in marketing, especially those beyond entry-level positions, are interesting and varied.You will usually have more opportunities to advance in a marketing career than in almost any other area of business.
37 Careers in MarketingBenefits: privileges, or monetary payments beyond salary or wages, that go with a job:Company CarExpense AccountBonuses
38 Careers in Marketing Occupational Area: Category or jobs that involve similar skills and aptitudes:Advertising --International MarketingCustomer Service --Marketing ResearchE-Commerce --Product ManagementEntrepreneur --Professional SalesFashion Merchandising --Public RelationsFinancial Services --Real EstateFood Marketing --Restaurant ManagementHospitality Marketing --Sales ManagementImporting/Exporting --Service MarketingSports Marketing --Travel/Tourism Marketing
39 Job Levels in Marketing Careers in MarketingJob Levels in MarketingEntry-level jobs usually require no prior experience and involve limited decision-making skills.Career sustaining jobs require a higher level of skill and more decision making.Slide 1 of 3
40 Job Levels in Marketing Careers in MarketingJob Levels in MarketingMarketing specialist employees must show leadership ability and make many decisions on a daily basis.Marketing supervisors must have good management skills, the ability to make many decisions on a daily basis, and excellent marketing skills.Manager/owners are competent to run a small business or a significant part of a large business.
41 Thinking CriticallyDiscuss how the marketing skills you would learn in a fast-food restaurant could be transferred to an industrial sales position.
42 Fact and Idea ReviewUsing a ball point pen as an example, explain the concept of form utility.The raw materials that go into a pen are less useful by themselves. Once they are processed into parts and assembled in the production process, they have increased value, or utility.
43 Thinking CriticallyWhen handheld calculators were introduced, they sold for $100. As they become popular, more companies introduced better and less expensive ones. Now you can purchase a handheld solar for as little as $1. Provide example of other products that were more costly when they were first put on the market than they are now.Some possible answers are computers, big-screen TV’s, DVD players, and CD players.Handout ROLEPLAYS
44 Role Play#1: STORE MANAGER Situation: You are to assume the role of manager of a local supermarket. A disgruntled customer (judge) complains to you about how manufacturers and retailers waste money on marketing. The customer (judge) thinks retail prices could be significantly reduced if manufacturers spent less money on marketing their products.
45 Role Play #2: Marketing Intern Situation: You are to assume the role of intern in the marketing department of the Easy Store Corporation, a large company that produces cardboard and plastic storage containers. The company recently appointed a new CEO who was hired to reduce costs and increase profit margins. As a result, the CEO is taking a close look at all departments, including the marketing department. Your supervisor (judge) is the head of the marketing department. Your supervisor (judge) will meet with the new CEO to justify the activities of the marketing department, and has asked you to gather some ideas to aid in this endeavor.