Marketing in Today’s World Intro to Business Chapter 13

Marketing Essentials Learning Targets Define Marketing Identify the Functions of Marketing List the Elements of the Marketing Mix

Marketing Essentials The Basics of Marketing Market Marketing A group of customers who share common wants and needs Must identify who your market is before selling your product. Ex. of markets: Gender, age, income levels Marketing The process of creating, promoting, and presenting a product or service to meet the wants and needs of customers. Used to find out if there is demand for a product

Marketing Essentials The Functions of Marketing Distribution Financing The process of getting goods and services to customers Includes purchasing, stock handling, inventory control and physical distribution. How? Financing Getting the money that is necessary for setting up and running a business

Marketing Essentials Marketing Information Management Pricing Gathering and analyzing information about consumers, trends, and competitors products. Making informed decisions requires good research and development Pricing Deciding how much to charge for a product or service so the business can make a profit Product/Service Management Obtaining, developing, maintaining and improving a product or product mix on response to market opportunities.

Marketing Essentials Promotion Selling Any effort to inform, persuade, or remind potential customers about a business’s products or services Selling Providing Customers with the goods and services to buy Relationship marketing – Build and maintain relationships with their customers

Marketing Essentials The Marketing Mix 4 P’s - basic marketing strategies Product Marketing is used to find out if there is a demand for a product How to make the product appeal to the customers Packaging – design, color, size and brand name Place Marketers have to decide how and where customers will buy their goods and services. Channel of distribution – a pathway to direct products to consumers Direct distribution – Occurs when goods or services are sold from the producer directly to the consumer Indirect distribution – Involves one or more intermediaries. Distribution affects the price of products. Cost of distribution is added to the product

Marketing Essentials Price Promotion 5th P – People To determine price a marketer must consider: How much are customers willing to pay? Is the price competitive with other products? Can the company make a profit Must find the break-even point The point at which total revenues, or sales, equal total costs and expenses. Promotion Making customers aware of a product Most familiar is advertising Others include discounts (rebates, coupons and sales) and giveaways 5th P – People The success of a marketing mix depends on people: Employees and Customers 13-1

Market Research and Product Development Learning Targets Describe the kinds of market research a company may use Identify the steps in developing a new product Market Research The gathering and analysis of information on the size, location, and makeup of a market Helps companies to produce and market products and services that attract customers Marketing Concept Involves determining the wants and needs of customers and providing them more efficiently and effectively than competitors. 13.2

Market Research and Product Development Information About Customers Demographics Facts about the population Include: age, gender, location and income Target Marketing Helps companies focus on the people most likely to buy their product or service Once demographics are figured out companies produce product to fit that group Market Segmentation The division of a market, for a product, into groups of customers who have the same needs and traits. Ex. Coach purse or Playstation

Market Research and Product Development The Seven Steps of Product Development Step 1: Generate Ideas Working together to think of new products (brainstorming) Includes people from development department, market research staff, and outside market researchers Collaboration is key Step 2: Screen Ideas The team must evaluate each plan How do these ideas fit the company’s mission and strategy? Does the new product compete with one of the company’s existing products Check with consumers. Likes and dislikes about ideas

Market Research and Product Development Step 3: Develop a Business Plan Written proposal provides a look at the market Includes: Estimated sales, costs, profit potential, market trends and competing products Step 4: Develop the Product Build a prototype: model of the actual product To see how it would look and test how it can be made Any changes need to be made at this time

Market Research and Product Development Step 5: Test-Market the Product Offer it in a limited market for a limited time To collect customer responses to see if the product is likely to succeed. This can allow competitors to enter market at the same time taking away the competitive advantage Step 6: Introduce the Product Once it has passes the market test, it is time to enter the marketplace Introduced through a publicity campaign (Can be expensive) Have a limited time

Market Research and Product Development Step 7: Evaluate Customer Acceptance Once introduced, marketers track customers and their responses Answers key questions used in research and development If the customers like the product the company will continue to produce it If it is not liked by the customers, it will be taken off the market 13-2