Chapter 10 - Marketing Basics

Chapter 10Marketing Basics

What is marketing?

What is marketing?Process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objects.

Marketing Mix

The blending of four marketing elements – product, place, price, and promotion.

Marketing MixPRODUCT

Idea Development

DesignPackagingPrototypes

Quality

Marketing MixPRICERetail

WholesaleProduction

CompetitiveStrategic

Marketing MixPROMOTION

SalesAdvertising

CommercialsOnlinePrint

Word of Mouth

Marketing MixPLACEStores

ShelvesChannelsCountries

Online

PLACE

In your journal:Make a list of all the

places you can purchase and iPod.

Marketing StrategyA company’s plan that identifies how it will use marketing to achieve its goals.

Target MarketA specific group of customers that have similar wants and needs.

Target MarketWho is the target market for…

Target MarketWho is the target market for…

Target MarketWho is the target market for…

Target MarketWho is the target market for…

Target MarketWho is the target market for…

Marketing OrientationAn approach that considers the

needs of customers when developing a marketing mix.

• Do not assume what customers want.• Use research to study customers and

their needs

Understanding Customers

Stand up!

Understanding CustomersFinal Consumers

Are persons who buy products and services mostly for their own use.

Business ConsumersA persons, companies, and organizations that buy products for the operation of a business,

for incorporation into other products and services, or for resale to their customers.

Understanding CustomersConsumer Decision Making Process

The specific sequence of steps consumers follow to make a purchase.

1. Recognize a need2. Gather information3. Select and evaluate alternatives4. Make a purchase decision5. Determine the effectiveness of the decision.

Understanding CustomersBuying Motives

The reason consumers decide what products and services to purchase.

1. Emotional buying motiveslove, fear, self-image

2. Rational buying motiveseconomy, comparison in cost

What did you learn?The best definition of marketing is…A. Promotion and sellingB. Producing and distributing products and

services to customersC. Finding customers and convincing them to

buy your productsD. None of the above

What did you learn?The best definition of marketing is…A. Promotion and sellingB. Producing and distributing products and

services to customersC. Finding customers and convincing them to

buy your productsD. None of the above

What did you learn?The two steps in a marketing strategy are…A. Developing a product and promoting it to

consumersB. Identifying a target market and developing

a marketing mixC. Conducting marketing research and

planning productionD. Pricing a product and distributing it to

customers

What did you learn?The two steps in a marketing strategy are…A. Developing a product and promoting it to

consumersB. Identifying a target market and developing

a marketing mixC. Conducting marketing research and

planning productionD. Pricing a product and distributing it to

customers

What did you learn?Which of the following is an example of rational buying?A. Valentine’s DayB. FearC. Mother’s DayD. Economy

What did you learn?Which of the following is an example of rational buying?A. Valentine’s DayB. FearC. Mother’s DayD. Economy

Marketing ResearchWhat is it?

Marketing ResearchFinding solutions to problems

though carefully designed studies involving customers.

Steps in Marketing Research

1. Define the marketing problem.2. Study the situation.3. Develop a data collection

procedure.4. Gather and analyze information.5. Propose a solution.

What are different types of research studiesor ways to collect data information?

PRODUCTEverything a business offers to

satisfy a customer's needs.

It starts with a basic product. Which is the simplest form of the product.

PRODUCTOptions – when customers are

offered choices of features.

Brand Name – provides a unique identification of a company’s

products.

WHY DID THEY FAIL?

AdvertisingAny paid form of communication through mass media directed at identified consumers to provide information and influence their actions.

AdvertisingPage 258

Read – Mass Promotion

Advertising Media• Television• Radio• Newspapers• Magazines• Mass mailings (junk mail)• Outside displays• Internet

Other Forms of Mass Promotion

Publicity Non-paid promotional communication presented by the media rather than by the business or organization that is being promoted.

Other Forms of Mass Promotion

Publicity Non-paid promotional communication presented by the media rather than by the business or organization that is being promoted.

Other Forms of Mass Promotion

Public RelationsAn ongoing program of non-aid or paid communications.

Planned to favorably influence public opinion about an organization.

Other Forms of Mass Promotion

Sales PromotionIncludes activities and materials designed to reinforce a company’s brand and image.

Incentive to take action!

Glogster• Bvbusiness.com

Pricing Factors• Supply and Demand• Uniqueness• Age• Season• Complexity• Convenience

Supply and Demand• A product with a ready supply will

have a lower price than a product with a very limited supply.

• If demand for a product is high, prices will increase.

Uniqueness• When a product has few close

competitors because it is unique, the price will be higher than products that are very similar to others.

Age• When products are first

introduced to the market, prices will be quite high. As products age, the price gradually decreases.

• Example – flat screen TV’s

Season• High prices just before or at the

beginning of a season• Low prices during other times of

the year• Example – winter apparel, holiday

decorations, etc.

Complexity• Highly complex and technical

products have higher prices than simple products.

Convenience• People pay for convenience!• Easily available and seller provides

high level of customer service, prices go up.

PRICEThe money a customer must pay for a product or service.

Price changes as a product moves from producer to consumer.

PRICE

SellingPrice

ProductCosts

OperatingExpenses Profit+= +

SELLING PRICEThe price paid by the customer for the product.

Operating ExpensesAll expenses of operating the business that are associated with the product.• Salaries• Storage• Display equipment• Facilities• Taxes

PROFITAmount of money available to the business after all costs and expenses have been paid.

Gross MarginDifference between the selling price and the product costs.

Do the Math…Product Costs - $39Operating Expenses - $210Profit - $250

What is the selling price?

MarkupAmount added to the cost of a product to set the selling price.

Product cost - $25Markup - 50%

What is the selling price?

MarkdownReduction from the original price.

Product cost - $25Markdown - 50%

What is the selling price?

Page 254 #3Product Name Original Price Sale Price Markdown ($) Markdown (%)

TOTAL Original Price –TOTAL Sale Price –TOTAL Saving –

PLACEAlso called distribution.

Determining the best methods and procedures to use so customers can find, obtain, and use a product or service.

Channel of DistributionThe route a product follows and the businesses involved in moving a product from the producer to the final consumer.

ManufactureWholesale

RetailConsumer

Channels of DistributionBUN

CHEESE

MEAT

ONIONLETTUCE

TOMATOE