1. Understand the Principles of Marketing.
Objective 3.01
Understand the Principles of Marketing.

2. Functions of Marketing

3. Functions of Marketing
What happens during the marketing process?
Businesses are involved in the process of origin, pricing, promotion, and distribution of products and services.
These products and services are made available in order to meet the goals of individuals and businesses.
What happens during the marketing process?
Businesses are involved in the process of origin, pricing, promotion, and distribution of products and services. These products and services are made available in order to meet the goals of individuals and businesses.

4. Functions of Marketing
Seven functions of marketing:
Product/service management
Distribution
Selling
Marketing-information management
Financing
Pricing
Promotion
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.
Distribution (Place) 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 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.

5. 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.
Distribution (Place) involves using the best ways for customers to locate, obtain, and use the products and services of a business.

6. Functions of Marketing
Selling involves communicating directly with potential customers in order to determine and satisfy their needs and wants.
Marketing-information management involves obtaining, managing, and using information about products and services, customers, and competitors to improve business decision-making and the performance of marketing activities.

7. Functions of Marketing
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.

8. Importance of Marketing Research

9. Marketing Research What is marketing research?
Using customers in order to find solutions to problems through carefully designed studies.
Steps in marketing research:
Define the marketing problem.
Study the situation.
Develop a data collection procedure.
Gather and analyze information.
Propose a solution.
What is marketing research?
Marketing research involves customers in order to find solutions to problems through carefully designed studies.

10. Marketing Research Types of Research Studies Surveys Focus groups
Observations
Experiment

11. Marketing Research Parts of a Product Basic product Product features
simplest form of a product or service
Product features
additions and improvements to the product or service
Options
choices of the product or service
Basic product is simplest form of a product or service.
Product features include additions and improvements to the product or service.
Options include choices of the product or service.
Brand name is a company’s unique identification for a product or service.
Packaging is the protection and security of a product or service before it is used.
Warranty is an offer to repair, replace, or provide a refund a product or service in
order to build the confidence of consumers in a business.

12. Marketing Research Parts of a Product Brand name Packaging Warranty
a company’s unique identification for a product or service
Packaging
the protection and security of a product or service before it is used
Warranty
an offer to repair, replace, or provide a refund a product or service in order to build the confidence of consumers in a business

13. Marketing Research Similarities of products and services
Meet the needs or satisfaction of a target market
Include a mix of the marketing elements (product, price, promotion, and distribution)

14. Marketing Research Differences between products and services
Products Services
Tangible Intangible
Perishable Non-perishable
Inseparable Separable
Easier to market More difficult to market
More control over quality Less control over quality

15. Selling Prices of Products and Services

16. Selling Prices of Products and Services
What factors influence the pricing of products and services?
Supply and demand
Uniqueness
Age
Season
Complexity
Convenience
Pricing formula
What factors influence the pricing of products and services?
Supply and demand
Uniqueness
Age
Season
Complexity
Convenience

17. Selling Prices of Products and Services
Selling Price = Product Costs + Operating Expenses + Profit
Example: $215=

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

19. Channels of Distribution

20. Channels of Distribution
What is channel of distribution?
How products and services reach final customers and the businesses involved
How do the needs between producers and consumers differ? They differ by:
Quantity
Businesses produce or sell massive quantities of products and services, where as each consumer needs fewer numbers.
Assortment
Businesses usually specialize in producing a specific type of products and services, where as consumers usually purchase a variety of products and services.
What is channels of distribution?
The channels of distribution is how products and services reach final customers and the businesses involved.
How do the needs between producers and consumers differ? They differ by:
Quantity-Businesses produce or sell massive quantities of products and services, where as each consumer needs fewer numbers.
Assortment-Businesses usually specialize in producing a specific type of products and services, where as consumers usually purchase a variety of products and services.
Location-Businesses may distribute products and services to customers in other countries as well in local communities.
Timing-There could be a gap in time when businesses produce products and services as to when consumers need them.

21. Channels of Distribution
How do the needs between producers and consumers differ? They differ by:
Location
Businesses may distribute products and services to customers in other countries as well in local communities. Consumers make purchases near home.
Timing
There could be a gap in time when businesses produce products and services as to when consumers need them.

22. Channels of Distribution
Types of channels of distribution:
Direct
Exchange of products and services between producer and consumer only.
Tonya makes and sells cakes to local customers.
Indirect
Exchange of products and services with one or more business and consumer
UPS delivers packages for American Eagle.

23. Main Types of Promotion

24. Main Types of Promotion
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.
What is the relationship between effective communication and 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.

25. Main Types of 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.
Advertisements and sales representatives.
Customers decode the message and provide feedback
Purchasing or inquiring about products or services.

26. Main Types of Promotion
Personalized is customized for individual customer.
Mass is communicated with many people with a common message.
Types of mass promotion:
Advertisement
Publicity
Public relations
Sales promotion