1. Producing and Marketing Goods and Services Chapter 10

2. What is marketing?
All of the activities used to insure the effective exchange of goods and services between businesses and consumers.

3. Purpose of Marketing
To develop, promote, and distribute products and services that satisfy customer needs and wants.

4. Marketing Functions

5. Marketing Philosophy Marketing Concept:
Considers the needs of customers when planning, pricing, distributing, and promoting a product or service

6. Marketing Strategy
Two-step process for planning and marketing products and services:
1. Identify a target market
2. Develop a marketing mix

7. Target Market Groups of people with similar wants and needs.
Most of these groups will show interest in the same products.
What is your favorite soft drink, and why?
Buying Motives

8. Target Market
Geographic segmentation – based on location such as home addresses
Demographic segmentation – based on measurable statistics, such as age or income
Psychographic segmentation – based on lifestyle preferences, such as being urban dwellers or pet lovers.

9. Why Identify a Target Market?
Your strategies for designing, pricing, distributing, promoting, and improving your product, service or idea will be
easier,
more effective, and
more cost-effective.

10. Who is the Target Market?

11. Who is the target market?

12. Who is the target market?

13. Who is the target market?

14. Who is the target market?

15. Who is the target market?

16. The Marketing Mix (The 4 P’s)
Product
A good, service, or idea designed to fill a consumer need or want.
Pricing
Balance between cost and affordability.
Promotion
Communicating information about the product to potential customers.
Place/Distribution
The product should be in the proper location in order to best get it from producer to consumer.

17. Hybrid cars
IPAD
Samsung 6
UGGS
DVD
VCR
HD Video Cameras
Under Armor
Starbucks
Home telephones
Computers
Nike

18. Product Life Cycle Introduction Stage Growth Stage
Slow sales volume to start
Makes no money at this stage
Growth Stage
Profitability begins to rise
Increased competition leads to decrease prices
Costs reduced

19. Product Life Cycle Maturation Decline
Brand differentiation is needed to keep market share
Sales volume peaks and competitors increase
Decline
Sales volume decrease
Profit becomes more of a challenge

20. Pricing
Price Skimming - A product pricing strategy by which a firm charges the highest initial price that customers will pay.
As the demand of the first customers is satisfied, the firm lowers the price to attract another, more price-sensitive segment.
Example: Apple – Iphone, IPOD

21. Pricing
Price Penetration - It sets a low initial price for a product in order to gain quick acceptance a segment of the market.
It calls for a sacrifice of short-term profits to establish market share
Example: Starbucks initially (1970’s), Xbox, Playstation (make money on games)

22. Place/Distribution
Effectively getting the products and services to consumers in the right quantity, assortment, and location at the right time.

23. Place/Distribution
Channels of Distribution: path a product travels from producer to consumer
Direct: goods bought directly from producer
Indirect: goods move through middle firms to get to consumer
Wholesalers--middle
Retailers—sells directly to consumer

24. The Importance of Promotion
Any technique designed to sell a product. Must communicate the features, uses, and benefits of products.
Makes customers aware of products.
Makes customers knowledgeable about products.
Persuades customers to like products.
Persuades customers to purchase products.

25. Advertising Promotions
Paid, non-personal communication used by an identified sponsor to inform an audience about a product.

26. Effective Advertising
Effective advertising contains the following FIVE elements:
Headline - Attracts the readers attention.
Copy - selling message after the headline
Price - If used, presented accurately and not misleading

27. Effective Advertising
Effective advertising contains the following FIVE elements:
Illustration - attract attention, create interest/desire, show product, must appeal to target market
Business Identification/Logo/Slogan - distinctive identification or saying people will identify with

28. Copy
Headline
Illustration
ID/Slogan

31. Advertising Persuasive Advertising
Seeks to influence consumers to buy the company’s product rather than those of its competition.
Typically emphasizes the quality of the firm’s goods or services.

32. Advertising Comparative Advertising
Compares two or more products directly.
Goal is to steal sales from the competition. PC
MAC

33. Advertising Reminder Advertising
Attempts to keep the product’s name in the consumer’s mind.
Used especially in the maturity and decline stages.

34. Commercials Ameriquest #1 Terry Tate—Reebok
Top Ten Super Bowl Commercials