Presentation on theme: "Principles of Business & Finance"— Presentation transcript:
1 Principles of Business & Finance 3.01 Understand principles of marketing.
2 MarketingThe process of developing, promoting, pricing and distributing products in order to satisfy customers’ needs and wants. Marketing involves all the activities necessary in getting a product from the producer to the consumer.
3 The Seven Functions of Marketing 1.Marketing Information Management2.Product/Service Management3.Financing4.Pricing5.Promotion6.Selling7.Distribution
4 Marketing-Information Management Obtaining information needed to make sound business decisions. Example: Taste tests and surveys.
5 Product/Service Management A. Risk Management: preventing or reducing business loss.B. Purchasing: Buying goods and services for use in the day-to-day about where a product is sold.Concepts and procedures necessary to obtain, develop, maintain, and improve a product or service mix in response to market opportunities.
6 FinancingObtaining money needed to finance the operation of a business. This includes bank loans and offering credit to customers.
7 PricingDetermining a value to charge for goods and services. It is important to consider competition and what consumers are willing and able to pay.
8 PromotionCommunication used to inform or remind people about a business’s products. Promotion also involves persuading customers to purchase a product.Your AD here!
9 SellingDetermining customer needs and wants through planned, personalized communication intended to influence purchase decisions and ensure satisfaction.
10 DistributionThe transporting, storing and handling of goods on their way from the manufacturer to the consumer. This includes the decisions about where to sell a product.
11 Marketing ResearchMarketing research involves customers in order to find solutions to problems through carefully designed studies.Steps in marketing research:Define the marketing problem.Study the situation.Develop a data collection procedure.Gather and analyze information.Propose a solution.What is marketing research?Marketing research involves customers in order to find solutions to problems through carefully designed studies.
12 Research Studies Types of research studies Surveys Focus groups ObservationsExperiment
13 Surveys The most common type of marketing research Surveys gather information from people using a planned set of questions.Delivered via mail, Internet, or telephone.
14 Focus GroupsA small group of consumers taking part in a group discussionFocus groups discuses experiences with products or make suggestions for product improvements.
15 ObservationsCollects information by recording the actions of consumers.Researchers observe how consumers study and choose products.
16 ExperimentAn experiment presents two carefully controlled products to customers in order to determine which product is preferred.Examples:Using two different sizes of packagesOffering coupons to customers to determine buying purchases.
17 Parts of a Product Basic product Product features Options Brand name PackagingWarranty
18 Parts of a ProductBasic product is simplest form of a product or service.Product features include additions and improvements to the product or service.Options include choices of the product or service.
19 Parts of a ProductBrand name is a company’s unique identification for a product or service.Packaging is the protection and security of a product or service before it is used.Warranty is an offer to repair, replace, or provide a refund a product or service in order to build the confidence of consumers in a business.
20 Products v. Services Similarities: Meet the needs or satisfaction of a target marketInclude a mix of the marketing elements (product, price, promotion, and distribution)
21 Differences between products and services Products v. ServicesDifferences between products and servicesProducts ServicesTangible IntangibleNon-Perishable PerishableSeparable InseparableEasier to market More difficult to marketMore control over quality Less control over quality
22 Factors Influencing Price Supply and demandUniquenessAgeSeasonComplexityConvenience
23 Pricing Formula Selling Price Product Costs Operating Expenses Profit The price paid by the customerProduct CostsCosts to the manufacturer for producing the product or paid by the business to buy the productOperating ExpensesAll expenses associated with running a businessProfitThe amount of money available to the business after all costs and expenses have been paid
24 Pricing Formula Selling price=product costs+operating expenses+profit Example: =SPSP=$215
25 Markup v. Markdowns Markup Markdown The amount added to the cost of a product to set the selling price.Selling price=product cost+markupExample: $35+$14=$49$35*40%=$14MarkdownA reduction from the original selling price.
26 Channels of Distribution Channel of distribution is how products and services reach final customers and the businesses involved.
27 Needs of the Customer Quantity Assortment Location Timing A small number at a given time.AssortmentA variety of products.LocationAll over the world.TimingMay want to purchase products at different times than producers are willing to make them.
28 Needs of the Business Quantity Assortment Location Timing Produce and sell large amounts at one timeAssortmentSpecialize in a specific type of productLocationNeeds to ship products all over the worldTimingOnly offer certain products during certain seasons.
29 Types of Channels Direct Indirect products move from the producer straight to the consumer with no other organizations involvedIndirectIncludes one ore more other businesses between the producer and the consumer
30 PromotionPromotion is any form of communication used to inform, persuade, or remind.Effective communication is the exchange of information so there is common understanding by all participants.
31 Personalized Promotion The most effective and the most expensive.Personal SellingDirect communication between the buyer and the sellerHelps to assess the needs of prospective customersDone face-to-face
32 Mass Promotion Directed to many people at the same time Advertising PublicityPublic RelationsSales Promotion
33 Advertising Most common types of advertising Television Radio NewspapersMagazinesMass MailingsOutside DisplaysInternet