2 Learning Objectives After completing this chapter, you’ll be able to: List the functions of marketing.Identify the importance of market research.Explain how channels of distribution work.
3 Why It’s ImportantEffective marketing puts the products in the hands of its targeted customers.
4 Marketing EssentialsTo successfully market a product, a company has to understand what people WANT to buy and WHY they want to buy it.
5 Basics of MarketingA market is a group of customers who share common wants and needs, and who have the ability to purchase a particular product.
6 Basics of MarketingMarketing is the process of creating, promoting, and presenting a product to meet the wants and needs of consumers.
7 Basics of MarketingBusinesses want you to buy their product so they perform detailed research on markets (like teenagers) to find and analyze potential customers in their market. This is called target marketing.
8 Functions of Marketing The seven functions of marketing are:DistributionFinancingMarketing information managementPricingProduct/service managementPromotionSelling
9 Marketing QuestionsEven before a product appears on the market, marketing specialist have to consider a number of questions.Who will the product appeal to?How much should it cost?Where should it be sold?What’s the best way to tell people about it?
10 Functions of Marketing A popular trend in today’s marketing world is relationship marketing.Companies use this strategy to build customer relations.
11 Marketing MixThe four elements of marketing—product, place, price, and promotion—are called the marketing mix, or the four Ps.
12 ProductMarketing is used first to find out if there is a demand for a product.Then it is concerned with how to present a product to the customer to make it as appealing as possible.
13 PlaceOne of the first things marketers have to consider is where to sell a product.Then marketers have to consider in what kind of location to sell their product.The placement of the product in a store is important.
14 PriceTo determine the price of a product a marketer considers three questions:How much are customers willing to pay?Is the price competitive with other products?Can the company make a profit?
15 PriceThe break-even point is the amount of money a company has to make on a product to pay for its costs.
16 Promotion Promotion consists of making customers aware of a product. The most familiar form of promotion is advertising.
17 PromotionSome marketers offer discounts in the form of coupons, rebates, and sales.Another way companies promote their products is through public relations, or publicity.
18 Market ResearchCompanies do market research to gather and study information about consumers to determine what kinds of goods and services to produce.
19 Market ResearchDemographics are facts about the population in terms of age, gender, location, income, and education.Once marketers know the demo-graphics of a market, they can develop products for it.
20 Product DevelopmentA company’s ability to create a new product or a slight variation of an already successful one is important to increasing sales.
21 Product Development The seven steps for developing a new product are: Generating ideasScreening ideasDeveloping a business proposalcontinued
22 Product Development Developing the product Test marketing the product Introducing the productEvaluating customer acceptance
23 Channels of Distribution A channel of distribution is a particular way to direct products to consumers.
24 Channels of Distribution Direct distribution occurs when the goods or services are sold from the producer directly to the customer.(Ex: online Nike store)
25 Channels of Distribution Indirect distribution involves one or more intermediaries.(Same Ex: buying Nike in a store)
26 Channels of Distribution The biggest impact distribution has on marketing is how it affects the price of products.Each time a product goes through another channel of distribution, the cost of marketing it increases.
27 Channels of Distribution Moving the product from manufacturer to the final user is an intermediary, or a go-between.Intermediaries include distributors, wholesalers, retailers, and even the Internet.
28 DistributorsA distributor represents a single manufacturer in a geographic area.
29 WholesalersA wholesaler receives large shipments of products from many different producers.Wholesalers break the shipments into smaller batches for resale.
30 Retailers A retailer sells goods directly to the customer. This is the final stop in the channel of distribution.