Chapter 13 Marketing

What is Marketing? Marketing – Marketing is the activity, set of institutions and processes for creating, communicating, delivering, and exchanging offerings with value for customers, clients, partners, and society at large. See Learning Goal 1: Define marketing and apply the marketing concept to both for-profit and non-profit organizations. Simply put, marketing is activities buyers and sellers perform to facilitate mutually beneficial exchanges. 13-2

The Marketing Mix – 4P’s LG2 The ingredients that go into a marketing program: Product Price Place Promotion See Learning Goal 2: Describe the four P’s of marketing. The Four P’s are also known as the marketing mix. 13-3

Two Different Markets Consumer Market (B2C) -- All the individuals or households that want goods and services for personal use and have the resources to buy them. Business-to-Business Market (B2B) -- Individuals and organizations that buy goods and services to use in production or to sell, rent, or supply to others. See Learning Goal 4: Show how marketers use environmental scanning to learn about the changing marketing environment. The buyer’s intended end use of the product determines whether a product is consumer or B2B. 13-4

Segmenting the Consumer Market The size and diversity of the consumer market forces marketers to decide which groups they want to serve. Market Segmentation -- Divides the total market into groups with similar characteristics. Target Marketing -- Selecting which segments an organization can serve profitably. See Learning Goal 5: Explain how marketers apply the tools of market segmentation, relationship marketing, and the study of consumer behavior. 13-5

5 Types of Market Segmentation Geographic Segmentation -- Dividing the market by cities, counties, states, or regions. Demographic Segmentation -- Dividing the market by age, income, education, and other demographic variables. Psychographic Segmentation -- Dividing the market by group values, attitudes, and interests. Benefit Segmentation -- Dividing the market according to product benefits the customer prefers. Volume (Usage) Segmentation -- Dividing the market by the volume of product use. See Learning Goal 5: Explain how marketers apply the tools of market segmentation, relationship marketing, and the study of consumer behavior. 13-6

Chapter 14 Developing and Pricing Goods and Services

Pricing Strategies Cost-Based pricing – A strategy, that measures cost of producing a product including materials, labor, and overhead. Demand-Based Pricing– Target costing is demand based which refer to designing a product that satisfies customers and meets the firm’s targeted profit margins. Competition-Based Pricing -- A strategy based on what the competition is charging for its products.

Cost Analysis Break-Even Analysis -- The process used to determine profitability at various levels of sales. The break-even point is where revenues equals cost. BEP= FC/ (P-VC) Total Fixed Costs -- All costs that remain the same no matter how much is produced or sold. Variable Costs -- Costs that change according to the level of production.

Chapter 15 Distributing Products

Types of Intermediaries Agents and Brokers -- Intermediaries who bring buyers and sellers together and assist in negotiating an exchange but do not take title to the goods. Wholesaler -- An intermediary that sells products to other organizations such as retailers, manufacturers, and hospitals. Retailer -- An organization that sells products to ultimate customers.

RETAIL DISTRIBUTION STRATEGIES Intensive Distribution -- Puts products into as many retail outlets as possible. Specifically for convenience goods like candy, cigarettes, biscuits etc. Selective Distribution -- Uses only a preferred group of the available retailers in an area. Specifically for shopping goods like clothing, furniture, appliances etc. Exclusive Distribution -- The use of only one retail outlet in a given geographic area. Specifically for specialty or luxury goods like skydiving equipment, diamond/platinum jewelery etc. See Learning Goal 4: Compare the distribution strategies retailers use. The retail strategy employed often depends on the product one is selling. 15-12

Chapter 16 Using Effective Promotions

The Promotion Mix Promotion is one of the four Ps of Marketing. Promotion Mix: It is the combination of promotional tools an organization uses. The traditional promotional tools are: Advertising Personal selling Public relations Sales promotion

Promotion and The Promotion Mix Promotion is one of the four Ps of Marketing. Promotion Mix: It is the combination of promotional tools an organization uses. The traditional promotional tools are: Advertising Personal selling Public relations Sales promotion

Personal Selling Advertising It is a paid, nonpersonal communication through various media by organizations and individuals who are in some way identified in the advertising message. Personal Selling The face-to face presentation and promotion of goods and services.

Public Relations (PR) The management function that evaluates public attitudes, changes policies and procedures in response to the public’s requests, and executes a program of action and information to earn public understanding and acceptance. The steps in good public relation program: Listen to the public. Change policies and procedures. Inform people that you’re being responsive to their needs.

Publicity Any information about an individual, product or organization that’s distributed to the public through the media and that’s not paid for or controlled by the seller. Advantages: Free, More Effective Than Advertising, Believable Disadvantages: No Control, No Repetition

Sales Promotion The promotional tool that stimulates consumer purchasing and dealer interest by means of short-term activities. B2C sales promotion techniques: Coupons, Cents-off Promotions, Sampling, Premiums, Sweepstakes, Contests, Bonuses, Catalogs, Demonstrations, Special Events, Lotteries, In-store Displays