Marketing CHAPTER 10 10-1 Marketing Basics 10-2 Develop Effective Products and Services 10-3 Price and Distribute Products 10-4 Plan Promotion

10-1 Marketing Basics Learning Targets: Define important marketing concepts. Identify the steps in a marketing strategy. Describe the consumer decision-making process.

UNDERSTAND MARKETING Chapter 10 Marketing activities – storing products, moving products to where they will be sold, on-line payment, gather data on customer needs, improve products, test new products Marketing businesses – advertising agencies, marketing research firms, shipping and delivery companies Marketing functions – seven functions Product and service management – design, develop, maintain, improve Distribution – determining the best ways for customers to locate, obtain and use the products and services, shipping, handling and storage

Financial analysis – budgeting for marketing activities Chapter 10 Selling – communicating directly with potential customers to determine and satisfy their needs Marketing information management – using market information to improve business decisions Financial analysis – budgeting for marketing activities Pricing – setting the value of products and services. Proving services for a fair price. Low enough for people to buy; high enough to make a profit Promotion – communicating information about products and services to potential customers

Chapter 10 Marketing Functions

MARKETING STRATEGY Develop a successful marketing strategy Chapter 10 MARKETING STRATEGY Develop a successful marketing strategy Identify a target market – a specific group of consumers who have similar wants and needs Create a marketing mix – the blending of the four marketing elements: product, distribution, price, promotion

UNDERSTAND CUSTOMERS Consumer decision-making process Recognize a need Chapter 10 UNDERSTAND CUSTOMERS Consumer decision-making process Recognize a need Gather information Select and evaluate alternatives Make a purchase decision Determine effectiveness of decision

Chapter 10 Buying Motives Emotional buying motives – reasons to purchase based on feelings, beliefs, and attitudes. Rational buying motives – guided by facts and logic

Develop Effective Products and Services 10-2 Develop Effective Products and Services Learning Targets Justify the importance of marketing research. Identify the components of a product. Describe how services differ from products.

CREATE AND IMPROVE PRODUCTS Chapter 10 Totally new products – not very common; airbags, the Internet, artificial hearts. Major improvements in existing products Minor improvements in existing products

PLAN MARKETING RESEARCH Chapter 10 PLAN MARKETING RESEARCH Steps in marketing research 1. Define the marketing problem. 2. Study the situation. 3. Develop a data collection procedure. 4. Gather and analyze information. 5. Propose a solution.

TYPES OF RESEARCH STUDIES Chapter 10 TYPES OF RESEARCH STUDIES Surveys - questionnaires Focus groups – small number of people take part in a discussion Observations – collect information by recording the actions or reactions of people Experiments – people given the choice between two alternative

PRODUCT PLANNING Parts of a product – basic product, features, options Chapter 10 Parts of a product – basic product, features, options Product planning procedures Idea development Idea screening Strategy development Production and financial planning Limited production and test marketing Full-scale production

Price and Distribute Products 10-3 Price and Distribute Products Learning Targets Discuss how the selling price of a product is calculated. Differentiate between a direct and an indirect channel of distribution.

VALUE AND PRICE Buyers usually want to pay the lowest price possible. Chapter 10 VALUE AND PRICE Buyers usually want to pay the lowest price possible. Sellers want to charge the highest price possible.

PRICING FACTORS Chapter 10 Supply and demand – the higher the demand, the higher price Uniqueness – little to no competition Age – as products age, price goes down Season – prices highest at beginning of season Complexity – higher prices than simple products Convenience – people will pay for easily available products/services

PRICE A PRODUCT Selling price Product costs Operating expenses Profit Chapter 10 PRICE A PRODUCT Selling price Product costs Operating expenses Profit Gross margin Gross Margin = Selling price + Product costs Selling price = Product costs + Operating expenses Profit

Chapter 10 PRICE A PRODUCT Markup – the amount added to the cost of a product to set the selling price Markdown – reduction from the original selling price

CHANNELS OF DISTRIBUTION Chapter 10 Need for distribution channels Differences in quantity Differences in assortment Differences in location Differences in timing Direct channel of distribution – product moves from producer straight to consumer Indirect channel of distribution – one or more other businesses between producer and consumer

10-4 Plan Promotion Learning Targets Justify the importance of communication in marketing. Identify and describe the common types of promotion.

Chapter 10 COMMUNICATION The communication process – through the internet, radio, TV, mailers Communicating through promotion – promotional messages from businesses, organizations and political figures

Chapter 10 PROMOTION Personalized promotion – most effective form; also most expensive. Mass promotion – directed to many people at the same time. Mass personalization – combination of the two.