1. What is marketing??
CHAPTER 19

2. Importance of Marketing
Marketing—a set of activities that gets products from producers to consumers
The role of the marketing manager
CHAPTER 20

3. Nature of Marketing Marketing activities
Buying- obtaining product to be resold
Selling- providing info to customers to help them make a purchase
Transporting-moving products from manufacturing site to where customers will buy them
Storing- holding products until customer purchases
Financing- obtaining credit when buying end extending credit when selling
Researching- studying buyer interests and needs
Risk taking- assuming risks of loss that may occur
Grading and valuing- grouping goods according to quality or size and assessing price value
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4. Nature of Marketing
Cost of marketing- half or more of the price the consumer pays goes toward marketing costs
Role of marketing- customer oriented; direct activities toward satisfying customers
CHAPTER 20

5. Market Identification
Whom to serve- customer profile based on characteristics such as age, income, gender, family status, etc.
Where to serve- limit to certain geographic area based on climate, city, rural, etc.
Identifying target markets- groups of people with similar needs to whom the company plans on selling their product(s)
CHAPTER 20

6. The Marketing Mix-4 Ps Product Price Distribution (place) Promotion
CHAPTER 20

7. ELEMENTS OF THE MARKETING MIX
Product- can be defined as all attributes, both tangible and intangible, that customers received in exchange for the purchase price
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8. ELEMENTS OF THE MARKETING MIX
Price- the amount of money given to acquire a product. The price must be high enough to cover the costs of producing and marketing the product.
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9. ELEMENTS OF THE MARKETING MIX
Place (Distribution)- the set of activities required to transport and store products and make them available to customers
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10. ELEMENTS OF THE MARKETING MIX
Promotion- providing information to consumers that will assist them in making a decision to persuade them to purchase a product or service
Advertising and personal selling
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11. Developing a Marketing Plan
Marketing plan—detailed written description of all marketing activities that a business must accomplish in order to sell its products; written for a specific time period, often one year
CHAPTER 20

12. Product
CHAPTER 19

13. The Product Life Cycle
Introduction stage- brand new product enters market; sales low & profits low
Growth stage- other brands are available; sales & profits are growing
Maturity stage- many competing brands that are very similar; sales highest but profits drop
Decline stage- new product is introduced that is better and customers begin to switch; sales & profits drop
CHAPTER 20

14. Product Life Cycle
CHAPTER 20

15. Product Categories
Industrial goods- designed for use by other businesses
Consumer goods- designed for personal or home use
Types of consumer products
Convenience goods
Shopping goods
Specialty goods
Unsought goods
CHAPTER 20

16. Convenience Goods
Inexpensive items that consumers purchase regularly without much thought
CHAPTER 20

17. Shopping Goods
Products that consumers purchase less frequently; have higher price and require some buying thought.
CHAPTER 20

18. Specialty Goods
Products that customers insist upon having and are willing to search for until they find them
CHAPTER 20

19. Unsought Goods
Products that consumers do not shop for and for which they have no strong need; consumers typically don’t think about these products
CHAPTER 20

20. Steps in Product Development
Develop an idea for a new product that customers want to buy.
Turn the idea into a workable product design.
Be able to produce the product and make it available to consumers at a price they are willing to pay.
CHAPTER 19

21. Creating Product Ideas
Consumer research (questionnaires, online research, consumer panels, etc.)
Product research
Pure research- research done without a specific product in mind
Applied research- solves existing product problems or design improvements
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22. Creating Product Ideas
Designing new products
Engineers & researchers build models (prototypes) of products
Product is tested
Resources to produce large quantities are located
Cost to produce is calculated
Selling price must cover all costs
CHAPTER 19

23. Product Design Levels Basic product Enhanced product Extended product
CHAPTER 21

24. Product Selection Product line Product assortment Packaging Branding
CHAPTER 21

25. Product Assortment Matrix
CHAPTER 21

26. Producing the Product
Different types of manufacturing processes-taking raw materials and converting to finished product
Mass production
Continuous processing
Repetitive production
Intermittent processing
Custom manufacturing
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27. Producing the Product
Mass production-assembly process that produces large number of identical products (often uses assembly line)
Continuous processing-raw materials constantly move through specially designed equipment to change their form
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28. Producing the Product
Repetitive production- same thing is done over and over to produce a product; activity is usually simple and may be part of a module or assembly process
Intermittent processing-short production runs to make predetermined quantities of different products
Custom manufacturing- design and build unique products that meet specific needs of customers
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29. The Nature of Services How services differ from products
Form- intangible
Availability- must be available when & where needed
Quality- cannot be separated from person or business supplying the service
Timing- cannot be stored or held until needed
Managing a service business
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30. Differences Between Services and Products
Intangible
Available only from the person providing them
Quality depends on the skill of the provider and may vary from provider to provider
Cannot be stored
Tangible
Available whenever the purchaser wants them
Quality depends on manufacturing process but should not vary significantly among batches
Can be stored for later use
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31. Price
CHAPTER 19

32. Planning a Business Purchase
What to purchase
When to purchase
From whom to purchase
How much to purchase
CHAPTER 22

33. Business Buying Processes
New task purchase
Modified rebuy
Straight rebuy
CHAPTER 22

34. Payment Terms and Discounts
List price
Payment terms
Discounts
Trade discount
Quantity discount
Seasonal discount
Cash discount
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35. Components of Price Selling price Cost of goods sold
Operating expenses
Margin or gross profit
Net profit
Markup
Markdown
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36. Components of Selling Price
CHAPTER 22

37. Pricing Strategies Pricing to meet competition
Pricing to earn a specific profit
Profit based on consumer demand
Pricing to sell more products
Pricing to provide customer services
CHAPTER 22

38. Controlling Costs Careful purchasing and operating decisions
Factors that can affect costs
Markdowns
Damaged or stolen merchandise
Returned merchandise
CHAPTER 22

39. Place (Distribution)
CHAPTER 19

40. Locating the Business Availability of raw materials
Transportation methods
Supply and cost of energy and water
Land and building costs
Labor supply
Location of customers
Economic and legal factors
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41. Production Planning Production planning activities Building layout
Inventory management- quantities of materials and supplies needed to produce product
Human resource planning-types of jobs, number of people needed, skills needed
Production scheduling- steps required, time to complete each step, sequence of steps
Building layout
Improving production processes
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42. Purposes of Distribution
Economic discrepancies
Economic utility
Time utility
Place utility
CHAPTER 21

43. Channels of Distribution
Channel members
Types of distribution channels
Direct distribution
Indirect distribution
Integrated marketing channels
CHAPTER 21

44. Distribution Channels for Consumer Products
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CHAPTER 21

45. Selecting a Channel of Distribution
Different types of consumers require different channels of distribution
Factors to consider
Perishability of the product
Geographic distance between producer and consumer
Need for special handling of the product
Number of users
Number of types of products manufactured
Financial strength and interests of the producer
CHAPTER 21

46. Transportation Decisions
Common transportation methods
Railways
Trucks
Piggyback service
Airplanes
Other transportation methods
Waterways
Pipelines
Containerization
CHAPTER 21

47. Product Handling Tracking products Product storage Order processing
Bar codes
Product storage
Warehouses
Distribution center
Order processing
CHAPTER 21

48. Promotion
CHAPTER 19

49. Promotion as Marketing Communication
Promotional mix
Consumer decision-making process
Problem recognition
Information search
Alternative evaluation
Purchase
Post-purchase evaluation
CHAPTER 22

50. Advertising Advertising purposes and media choices
Planning and managing advertising
Advertising budget
Timing of advertising
Advertising evaluation
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51. Advertising Purposes To inform and educate consumers
To introduce a product or business
To announce improvement or product change
To reinforce features and benefits
To increase frequency of use
To increase variety of uses
To convince people to enter a store
To develop a list of prospects
To make a brand, trademark, or slogan familiar
To improve the image of a company or product
To gain support for ideas or causes
CHAPTER 22

52. Types of Advertising Media
Publication advertising
Mass media advertising
Outdoor advertising
Direct advertising
Display advertising
Internet advertising
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53. Truth in Advertising and Selling
False advertising
Full disclosure
Substantiation
Penalties for violations
Case-and-desist order
Corrective advertising
Fines
CHAPTER 22

54. Personal Selling Studying the wants of customers (buying motives)
Presenting and demonstrating the product
Answering customer questions
Closing the sale
Follow-up
CHAPTER 22

55. Sales Promotions Coupons Promotional material Samples Demonstration
Displays
Self-service merchandising
CHAPTER 22