2 Scope of Marketing Everything around you Marketing Think of purchases you have (or have not) madeHow does a business influence your purchases?Southwest AirlinesMarketingThe process of planning, pricing promoting, selling and distributing ideas, goods, or services to create exchanges that satisfy customersAn ongoing process – why?
3 Ideas, Goods, and Services generally ideals, thoughtsPoliticians, environmentalistsGot Chocolate Milk?GoodsTangible items that have monetary value and satisfy your needs and wantsExamples?ServicesIntangible items that have monetary value and satisfy your needs and wants
5 Foundations of Marketing Practice of marketing depends on 4 key areas of knowledge: 4 foundations of marketingBusiness, management, entrepreneurshipUnderstanding these areas affect decision makingCommunication and interpersonal skillsInteract effectively with othersEconomicsEconomic principlesProfessional DevelopmentCareer exploration, development and growth
6 7 Functions of Marketing Product/Service ManagementObtaining, developing, maintaining, and improving a product or a product mix in response to market opportunitiesMarketing research = determining needs/wantsPricingHow much to charge for goods and services in order to make a profitCostsCompetition priceCustomers willingness and ability to pay
7 7 Functions of Marketing Continued… PromotionEffort to inform, persuade, or remind potential customers about a business’s product or servicesExamples of promotion?Other than product and services promotion, what else can a company promote?DistributionThe process of deciding how to get goods in customers’ handTransportation, storing, tracking
8 7 Functions of Marketing Continued… Marketing Information ManagementGathering information, storing it, and analyzing the informationWhy?Apple exampleHow would you gather information?Nielsen – Consumer and Consumer behavior (watch and buy)J D Power & Associates – primarily customer surveysHow often?
9 7 Functions of Marketing Continued… FinancingGetting the money necessary to pay for setting up and running a businessesLoans, selling shares of stock, issuing bondsHelping others obtain your product/serviceExtending credit to customersPayment optionsTerm payments, credit cards, etc.SellingProviding customers with goods and services they wantDirectly to the customer or businessTechniques and activities
10 Marketing Concept Marketing Concept The idea that a business should strive to satisfy customers’ needs and wants while generating a profit for the firmWhere is the focus?Success comes when all 7 functions support the marketing concept ideaCustomer Relationship Management (CRM)An aspect of marketing that combines customer information with customer service and marketing communicationsMeaningful one-on-one communications via customer intelligence
11 Review and critical thinking… On a piece of paper, answer the following (page 7, 1-3 and 5):Name 2 ideas that can be marketedWhere do exchanges take place?What is the main difference between consumers and industrial usersList at least 3 ways the Internet has changed marketing functions
13 Economic Benefits of Marketing Marketing has an important role in the economyProvides the means for competition to take placeBusinesses try to create new or improved products at lower prices than their competitorsHow does this affect the consumers?How does this affect businesses to have such competition?New and improved productsContinuing to look at ways to satisfy customersHow has competition shaped the personal computer industry?
14 Economic Benefits of Marketing Continued… Lower pricesWhat happens in the marketplace when prices drop?What happens to production when demand increases?Overall unit costs go downFixed costsRent, insurance, etc. stay the same regardless of productionVariable costsCosts that change given the amount of productionLabor, materials, etc.Example: $20,000 in fixed costs, Quantity produced is 10,000 units. How much per unit does it cost the company?How much per unit would it cost the company if they produced 200,000 units?
15 Added Value and Utility The functions of marketing add value to a productUtilityAn attribute of a product or service that makes it capable of satisfying consumers’ wants and needs5 economic utilitiesPlaceTimePossessionInformationForm (not directly related to marketing; however, the research and product design makes it a crucial part of the marketing process
16 UtilityForm UtilityInvolves changing raw materials or putting parts together to make them more usefulDeals with making or producing thingsTaking things of little value and putting them together to create more valueSpecial features or ingredients in a product add value and increases its form utilityExample: Automobiles
17 Utility Continued… Place Utility Involves having a product where customers can buy it.Businesses study consumers shopping habits to determine the most convenient and efficient locations to sell productsDirect approachCatalogsInternetRetail stores (considered an intermediary)
18 Utility Continued… Time Utility Having a product available at a certain time of year or a convenient time of dayIncreases the value of the products by having them available when consumers want themExamples?24 hour super storesCoffee shopsExtended hours during holiday shopping seasons
19 Utility Continued… Possession Utility When legal ownership of a product changes handsHow do you come into possession of the items you want? What exchanges are made?How does this add value?Possession utility also includes providing payment options
20 Utility Continued… Information Utility Involves communication with the consumerExamples:LabelingAdvertisingWeb Assist and ManualsHow do these add value?Provide information to customers by explaining the features and benefits of the products
21 ReviewThe added value to a product that marketing provides is called ___________________How does marketing help to lower prices?In what way is marketing related to form utility?Which utility is added by drive-through windows at fast-food restaurants?In a business-to-business transaction, the seller offers the buyer a 2% discount for paying a bill early. Assuming the buyer took advantage of this offer, how much would be discounted on a $10,000 invoice?
23 Market Can you make your product appeal to everyone? Market What considerations do we need to make?MarketAll people who share similar needs and wants and who have the ability to purchase your products
24 Consumer vs. Industrial Markets Consumer MarketConsists of consumers who purchase goods and services for personal useWhat does a consumer take into consideration?LifestylesPrice, convenience/easier, improved appearance, status, or some other motivation that provides satisfactionIndustrial Market (AKA Business to Business Market)Businesses that buy products for use in their operationsWhat does the business take into consideration?ProfitsEfficiency
25 Market ShareThe percentage of total sales volume generated by all companies that compete in a given marketContinuously changesWhy?
26 Calculating Market Share Unit sales is bestThe manager of Geneganslet Golf Course discovers that all the courses in the market area together host 50,000 rounds of golf a year. Of those rounds, Open Fairways hosts 7,000, and therefore has _________ market share.Market Share research and exercise
27 Marketing Mix Four basic marketing strategies 4 P’s ProductPricePromotionPlace/DistributionMarketers use these to influence potential customers
28 Target MarketA group of people identified as those most likely to become customersAll marketing strategies are directed to the target marketWhen there is a lack of a target market, the marketing plan has no focus
29 Marketing Mix~Product: choosing what products to make and sell Design, features, brand name, packaging, service, and warranty~Place: Getting the product into the consumer’s handsWhere and how a product will be distributed, transportation, and stock levels~Price: reflection of what customers are willing to pay and compared to competitors~Promotion: decisions about advertising, personal selling, sales promotion, publicity
30 Strategies List price or MSRP Discounts Allowances Credit Terms Pricing StrategiesPromotional StrategiesList price or MSRPDiscountsAllowancesCredit TermsPayment PeriodPromotional PricingPeriod of timeHow potential customers will be told about a company’s productsThe messageMedia selectedSpecial offersTiming of promotional campaigns
31 Consumers vs. Customers Consumers – Those who “consume” the product/serviceCustomers – Those who buy the product/serviceExample: CerealTwo target markets:Children = consumersParents = customersCustomer ProfileA listing of information about the target market:Age, income level, ethnic background, occupation, attitudes, lifestyle, geographic residence
32 ReviewName the four P’s of the marketing mix and explain the importance of a target market for each of themIf total sales in the ice cream category were $4.4 billion and Breyers’s sales were $650,000,000 what would be its market share? Round to the tenth decimal place.Write a customer profile for a magazine of your choice. Provide examples of articles and advertisements that support that profile