Understand the role marketing in business. Essential Standard 3.00 Understand the role marketing in business.

Understand principles of marketing. Objective 3.01 Understand principles of marketing.

Topics Functions of marketing Importance of marketing research to the creation or improvement of products or services Selling prices of products and services Classification of channels of distribution Classification of the main types of promotion

Functions of marketing

Functions of Marketing What happens during the marketing process? Activities of marketing happen throughout the seven 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.

Functions of Marketing continued Seven functions of marketing: Marketing-information management Product/service management Pricing Place (Distribution) Selling Financing 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. Place (Distribution) 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.

Importance of marketing research to the creation or improvement of products or services

Marketing Research What is marketing research? 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 continued Types of research studies Surveys Focus groups Observations Experiment Surveys are a specific set of questions asked to consumers. Focus groups are small groups of consumers that discuss a specific product. Observations record the actions of consumers rather than questioning them. Experiment is a comparison of two controlled alternatives for consumers.

Marketing Research continued 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 place (distribution)

Marketing Research continued Differences between products and services Products Services Tangible Intangible Non-perishable or perishable Perishable Separable Inseparable 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? Pricing formula Selling price =product costs + operating expenses + profit Example: $215=67+38+100 What factors influence the pricing of products and services? Supply and demand Uniqueness Age Season Complexity Convenience

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

Classification of distribution and promotion

Classification of Channels of Distribution What is channel of distribution? How does having a channel of distribution help businesses? What is channels of distribution? The channels of distribution is how products and services reach final customers and the businesses involved. Channels of distribution allow businesses to adjust quantity and assortments accessible in convenient locations for customers and storage of products.

Classification of Channels of Distribution continued Types of channels of distribution: Direct Example-Tonya makes and sells drapes to local customers. Indirect Example-UPS delivers packages for Ann Taylor. Direct involves the exchange of products and services between producer and consumer only. Examples of direct: Local cleaning company promotes its business and provides services to its local customers. Mary sells her famous juices at the local festivals. Indirect involves the exchange of products and services with one or more business and consumer. Examples of indirect: Drugstores sell Maybelline Cosmetics. Macy’s sells Nautica line of clothing.

Classification of the Main Types of Promotion How do you know when communication is effective? What is the relationship between effective communication and 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? 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.

Classification of the Main Types of Promotion continued Personalized Mass What are some examples of personalized promotion? What are some types of mass promotion? Main types of promotion: Personalized is customized for individual customer. Mass promotion is communicated with many people with a common message. Examples of personalized promotion: visits, telephone calls, live audio and video Internet connections Types of mass promotion: advertisement, publicity, public relations, sales promotion