Understand the Principles of Marketing. Objective 3.01 Understand the Principles of Marketing.

Functions of Marketing

Functions of Marketing What happens during the marketing process? Businesses are involved in the process of origin, pricing, promotion, and distribution of products and services. These products and services are made available in order to meet the goals of individuals and businesses. What happens during the marketing process? Businesses are involved in the process of origin, pricing, promotion, and distribution of products and services. These products and services are made available in order to meet the goals of individuals and businesses.

Functions of Marketing Seven functions of marketing: Product/service management Distribution Selling Marketing-information management Financing Pricing Promotion Product/service management may include several businesses involved with designing, developing, maintaining, improving, and obtaining products and services in order to meet the needs of customers. Distribution (Place) involves using the best ways for customers to locate, obtain, and use the products and services of a business. Selling involves communicating directly with potential customers in order to determine and satisfy their needs and wants. Marketing-information management involves obtaining, managing, and using information about products and services, customers, and competitors to improve business decision-making and the performance of marketing activities. Financing involves budgeting for marketing activities, securing necessary funds for operations, and providing financial assistance to customers. Pricing involves determining and communicating the value of products and services. Promotion involves communicating information such as features and prices about products and services to potential customers.

Functions of Marketing Product/service management may include several businesses involved with designing, developing, maintaining, improving, and obtaining products and services in order to meet the needs of customers. Distribution (Place) involves using the best ways for customers to locate, obtain, and use the products and services of a business.

Functions of Marketing Selling involves communicating directly with potential customers in order to determine and satisfy their needs and wants. Marketing-information management involves obtaining, managing, and using information about products and services, customers, and competitors to improve business decision-making and the performance of marketing activities.

Functions of Marketing Financing involves budgeting for marketing activities, securing necessary funds for operations, and providing financial assistance to customers. Pricing involves determining and communicating the value of products and services. Promotion involves communicating information such as features and prices about products and services to potential customers.

Importance of Marketing Research

Marketing Research What is marketing research? Using 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.

Marketing Research Types of Research Studies Surveys Focus groups Observations Experiment

Marketing Research Parts of a Product Basic product Product features simplest form of a product or service Product features additions and improvements to the product or service Options choices of the product or service Basic 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. Brand 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.

Marketing Research Parts of a Product Brand name Packaging Warranty a company’s unique identification for a product or service Packaging the protection and security of a product or service before it is used Warranty an offer to repair, replace, or provide a refund a product or service in order to build the confidence of consumers in a business

Marketing Research Similarities of products and services Meet the needs or satisfaction of a target market Include a mix of the marketing elements (product, price, promotion, and distribution)

Marketing Research Differences between products and services Products Services Tangible Intangible Perishable Non-perishable Inseparable Separable Easier to market More difficult to market More control over quality Less control over quality

Selling Prices of Products and Services

Selling Prices of Products and Services What factors influence the pricing of products and services? Supply and demand Uniqueness Age Season Complexity Convenience Pricing formula What factors influence the pricing of products and services? Supply and demand Uniqueness Age Season Complexity Convenience

Selling Prices of Products and Services Selling Price = Product Costs + Operating Expenses + Profit Example: $215=67+38+100

Selling Prices of Products and Services Markup The amount charged of the selling price to cover the operating expenses and profit usually stated as a percent. Selling price = product cost + markup Example: $35 * 40% = $14 $35 + $14 = $49 Markdown A reduction from the original selling price.

Channels of Distribution

Channels of Distribution What is channel of distribution? How products and services reach final customers and the businesses involved How do the needs between producers and consumers differ? They differ by: Quantity Businesses produce or sell massive quantities of products and services, where as each consumer needs fewer numbers. Assortment Businesses usually specialize in producing a specific type of products and services, where as consumers usually purchase a variety of products and services. What is channels of distribution? The channels of distribution is how products and services reach final customers and the businesses involved. How do the needs between producers and consumers differ? They differ by: Quantity-Businesses produce or sell massive quantities of products and services, where as each consumer needs fewer numbers. Assortment-Businesses usually specialize in producing a specific type of products and services, where as consumers usually purchase a variety of products and services. Location-Businesses may distribute products and services to customers in other countries as well in local communities. Timing-There could be a gap in time when businesses produce products and services as to when consumers need them.

Channels of Distribution How do the needs between producers and consumers differ? They differ by: Location Businesses may distribute products and services to customers in other countries as well in local communities. Consumers make purchases near home. Timing There could be a gap in time when businesses produce products and services as to when consumers need them.

Channels of Distribution Types of channels of distribution: Direct Exchange of products and services between producer and consumer only. Tonya makes and sells cakes to local customers. Indirect Exchange of products and services with one or more business and consumer UPS delivers packages for American Eagle.

Main Types of Promotion

Main Types of Promotion Effective communication consists of an understanding of information between the sender and the receiver. The sender selects a channel of communication and the receiver indicates understanding by providing some form of feedback. What is the relationship between effective communication and promotion? What is the relationship between effective communication and promotion? Businesses use promotion to communicate with potential customers about their products and services. Information about products and services is encoded in a promotional message. Promotional messages may be delivered through advertisements and sales representatives. Potential customers decode the message and provide feedback by way of purchasing or inquiring about products or services.

Main Types of Promotion Businesses use promotion to communicate with potential customers about their products and services. Information about products and services is encoded in a promotional message. Advertisements and sales representatives. Customers decode the message and provide feedback Purchasing or inquiring about products or services.

Main Types of Promotion Personalized is customized for individual customer. Mass is communicated with many people with a common message. Types of mass promotion: Advertisement Publicity Public relations Sales promotion