1. Essential Standard 3.00 Understand the role marketing in business. 1

2. Objective 3.01 Understand principles of marketing. 2

3. 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 3

4. Functions of marketing 4

5. Functions of Marketing What happens during the marketing process? –Businesses are involved in the process of developing, pricing, promotion, and distribution of good and services. These products and services are made available in order to meet the goals of individuals and businesses. Activities of marketing happen throughout the seven functions of marketing 5

6. 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. 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 (MIM) 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.

7. Importance of marketing research to the creation or improvement of products or services 7

8. Marketing Research What is marketing research? –Marketing research involves customers in order to find solutions to problems through carefully designed studies. 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. 8

9. Marketing Research continued Types of research studies 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. 9

10. Marketing Research continued Similarities of goods and services Meet the needs or satisfaction of a target market Include a mix of the marketing elements: product, price, promotion, and place (distribution) 10

11. Marketing Research continued Differences between products and services GoodsServices TangibleIntangible Non-perishable or perishableAlways Perishable Separable Inseparable Easier to market More difficult to market More control over quality Less control over quality 11

12. Selling prices of products and services 12

13. Selling Prices of Products and Services What factors influence the pricing of goods and services? Supply and demand Uniqueness Age Season Complexity Convenience Pricing formula Selling price =product costs + operating expenses + profit Example: $215=67+38+100 13

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

15. Classification of distribution and promotion 15

16. Classification of Channels of Distribution What is channel of distribution? –The channels of distribution is how products and services reach final customers and the businesses involved. How does having a channel of distribution help businesses? –Channels of distribution allow businesses to adjust quantity and assortments accessible in convenient locations for customers and storage of products. 16

17. Classification of Channels of Distribution continued Types of channels of distribution: –Direct: Consumers buy directly from the manufacturer. Example-Pumpkin patch selling pumpkins –Indirect: Consumers buy from intermediaries (middlemen). Example-Dre Beats sold at WalMart 17

18. Classification of the Main Types of Promotion How do you know when communication is effective? –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. 18

19. Classification of the Main Types of 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. 19

20. Classification of the Main Types of Promotion continued Main types of promotion: –Personalized is customized for individual customer. –Mass promotion is communicated with many people with a common message. What are some examples of personalized promotion? –telephone calls, live audio, direct e-mails, social media promos What are some types of mass promotion? –advertisements, publicity, public relations, sales promotion 20