1. THE ECONOMIC BENEFITS OF MARKETING

2. Marketing makes buying easy for customers.
Marketing serves as a bridge between the customer and the seller of products and services.
Marketing makes buying easy for customers.
Marketing creates new and improved products at lower prices.

3. The functions of marketing add value to a product
Utility
The functions of marketing add value to a product
The added value is called Utility
Utilities are the attributes of a product or service that make it capable of satisfying consumer’s wants and needs
There are 5 utilities involved with all products
Form
Time
Place
Possession
Information

4. Form Utility
Involves changing raw material or putting parts together to make them more useful
Form Utility deals with making or producing things

5. An Example of Form Utility
A Tree
In its original state it has value as an object of beauty, supplies oxygen, prevents soil erosion, and provides a home for animals.
When a tree is cut down and used in making other products its usefulness changes. The raw material becomes part of a new product that has a different value
Form Utility takes place also when a manufacturer assembles parts into a product pieces of wood assembled into furniture

6. Place Utility Having a product where customers can buy it
Businesses study consumer shopping habits to determine the best sales outlets for their products
Outlets include catalogs, the internet, retail stores

7. Time Utility
Having the product available at a certain time of the year or a convenient time of day
The value of the product is increased by having it available when consumers want them
Time Utility requires the marketer to plan ahead in order to have the right product at the right time
Toy companies introduce new toys for Christmas every February at the Toy Fair in New York City

8. Possession Utility The exchange of a product for some monetary value
Alternatives to cash may be accepted these include:
In business to business situations companies also grant customers credit
Credit Cards
Checks
Installment Plans
Layaway
Possession Utility is involved every time legal ownership of a product changes hands

9. Information Utility Involves communication with the consumer
Examples of sources of information:
Sales Associates
Packaging
Tags and Labels
Advertising
Owner’s Manuals
Internet Sites
Telephone Customer Service

10. Principles of Marketing
What are we doing?
Product/Service Management

11. Define 7 Functions using 1 word:
channel management = distribution
marketing-information management = data
Pricing = price
product/service management = lifecycle
Promotion = communication
Selling = personal (1 on 1)
Financing = capital (investment, backing)

12. Marketing IS EVERYWHERE!

13. Product Service Management – Designing, producing, maintaining, improving, and obtaining products to meet customer’s wants and needs

14. Product/Service Management
Helps to determine which products a business will offer and in what quantities
Aids in determining and developing a company’s/product’s image
Provides direction for other marketing activities based on changes in a product’s life cycle

15. Product Planning
Making decisions about features that are needed to sell a business’s products, services or ideas
Product Features
Packaging
Labeling
Branding
Services
Warranties
Water bottle example: How much would you pay for a deer park bottle? Smart water? Fiji? Why would you pay more for one than the other?

16. Product Planning Allows a business to
Coordinate existing products and features
Add new products
Delete products that are no longer attracting customers

17. Product Mix KRAFT Company:
All the different products that a company makes or sells
KRAFT Company:
Kraft
Kool-Aid
Nabisco
Maxwell House
Oscar Mayer
Post Cereal products

18. Product Mix another example
SC Johnson

19. Product Mix another example
Procter and Gamble

20. Product Mix
To determine a company’s product mix, a business needs to identify:
Its target market
Its competitors
The image it wants to project
The product mix must be periodically reviewed to determine if products need to be expanded, modified, decreased, or eliminated

21. Product Lines
Product line – a group of closely related products sold by a business

22. Product Items
Product item – a specific model, brand, or size of a product within a product line

23. Product Width and Depth
The width and depth of a company’s product offerings defines the product mix

24. Product Width
The number of different product lines sold by one manufacturer

25. Product Depth From one brand name
The number of product items within each specific product line
From one brand name
depth

26. Gillette Product Mix Width vs. Depth
Oral Care
Blades & Razors
Personal Care
Batteries
Appliances
Depth

27. Product Mix Strategies
Develop completely new products for existing lines
Drop existing product to allow room for new products
Expand or modify existing product lines

28. Developing New Products
7 Key Steps to New Product Development
1. Generate idea – focus groups, idea sessions
2. Screening ideas – evaluated for potential conflicts and profitability
3. Developing a business proposal – production requirements are considered
4. Developing the product – takes on a physical shape, develop marketing strategy

29. Developing New Products
7 Key Steps to New Product Development
5. Testing the product with consumers – test on small groups
6. Introducing the product (commercialization) – must introduce product to public ASAP
7. Evaluating customer acceptance – study sales information

30. Developing Existing Products
Companies constantly evaluate their product mix to see if they can further expand their product lines or modify existing products
Helps to reach new markets and increase overall sales
Can be very expensive
Increased inventory
More promotion
Additional storage and distribution

31. Introducing new product items, or services to meet customer needs
Line Extensions
Introducing new product items, or services to meet customer needs

32. Product Modifications
An alteration in a company’s existing products

33. Deleting a Product
There are several reasons why a company may decide to eliminate a product item or line
Obsolescence
Loss of Appeal
Change in company objective
Replacement with new products
Lack of profit
Conflict with other products in the line
Why do you think the Tiger Gatorade was eliminated by Gatorade?