Marketing Part 1 – Introduction and Product planning

MarketingPart 1 – Introduction and

Product planning

INTRODUCTION

MARKETINGThe performance of business activities

that direct the flow of goods and services from producer to consumer

MARKETING CONCEPTThe process of satisfying a customer’s

needs while achieving the firm’s goal In 1950’s companies concerned

themselves with finding customer’s needs

MARKETING PLANA set of strategies for accomplishing

marketing objectives – marketing plan

FUNCTIONS OF MARKETING

• Buying/Purchasing• Selling• Distribution and storing• Financing • Risk management• Standardizing and gathering

marketing information • Product/service planning• Pricing• Promotion

UTILITY

The power of a good or service to satisfy a human need

• Form – Changing raw materials into usable consumer goods. (steel to make cars)

• Time - Making the product available when the customers want to purchase it

• Place - Making the product available at a location where customers want to purchase it

• Possession/Ownership – Making the orderly transfer of ownership (allowing the buyer to use a VISA)

UTILITIES AND MARKETING

• Marketing deals with– Time– Place– Ownership

• Manufacturing functions deal with:– Form

MARKETING MIX

The combination of:

ProductPriceDistributionPromotion

directed to reach a particular target market.

Where to begin

• In implementing the marketing concept the first step is to listen to consumers about their needs and wants.

• Effective marketing research involves listening to employees, shareholders, dealers, and customers.

WHAT DO CONSUMERS WANT?

What do consumers want?

• Consumers buy products because they have a – use for the good– like the convenience– take pride in ownership

Who are our customers?

MARKET SEGMENTATIONProcess of dividing a market by similar

traits

MARKET SEGMENTA group of individuals or firms that

share one or more common characteristics –

Females in the market

TARGET MARKETA market segment toward which a firm

directs its marketing effort is target market.

Pepsi directs their advertising to the 18 to 34 age group

Market research

• What do you think?• Internal data

– Accounts receivable– Comparisons of sales by territory

or product line– Profitability of particular divisions

• External data– Observation– Studies– Surveys

• Market segmentation allows market researchers to determine how and why certain groups of people buy products and services– Demographics – age, sex, income,

occupation, household size, education

– Geographic – weather, culture

Classifying products

• Industrial goods – good purchased by industry commerce, government, and intermediary companies for the production of other goods or for the resale to consumers (B2B)

• Consumer – finished goods intended for use by the consumer for personal, family, or household use

Types of consumer goods

• Convenience goods –can be bought with little shopping effort – purchased in convenience stores,

vending machines, newsstands– Ex: gum, milk magazines, bread, and

newspapers

• Shopping goods –purchased after shopper has compared such things as price, quality, style, and color – Require more of the shopper’s time

and effort and are more expensive– Furniture, carpeting, automobiles– Warranties needed to attract buyers

• Specialty goods require even more shopping effort because they have special qualities– Shopper is willing to make special

effort to buy– Custom-made furniture, gourmet

foods, high-quality clothes– Fine wines, artwork– May require considerable time,

effort, and money to find

Classifying Services

• Industrial• Consumer

Product Life Cycle

• Introduction– Inform/promotion

• Growth• Maturity• Declining

– Extend product’s life:•Persuading consumers that they

need additional items.•Finding new uses for the

product.•Changing sizes, packaging, and

labeling.

Introduction

• Challenge of making potential customers award of the product’s existence, its features, benefits, and uses, consumer awareness and acceptance of the product is very low, no competitors have hit the market, profits are low, and promotional expenses are very high

Growth

• Acceptance by public, repeat sales, profits begin to happen , and competition begins

Maturity

• Reaches it speak in sales and profits, there begins a slight decline in sales and profits and company needs to make a decision about the product’s life

Decline

• Sales volume falls greatly, profits are near zero and there is little hope for the product to ever be a profitable success

Naming your product

• Simplicity– 5-7 letters– Easy to remember– Cost

• Easy to pronounce– No tongue twisters

• In-line with the product– “Turtle” for a computer?

• Suggestive of the quality or use of the product– Examples: Spray & Wash, Gold Medal,

and Brisk.

• Distinctive and individual• Able to stand the test of time

– Not based on a short-lived fad

Packaging

• All are elements of product packaging – attention getters, divide contents into usable portions, used to inform users of the product, both marketing and functional value

• All those activities involved in developing and providing a container for a product are packaging.

Terms

• PRODUCT LINE– Kellogg’s producing Corn Flakes,

Raisin Bran, Rice Krispies, etc, is an example of product line.

• PRODUCT MIX– General Mills selling yogurt,

cereal, and baking products is an example of product mix.

• TRADEMARK– A brand that is registered with the

U.S. Patent and Trademark Office to legally protect it – trademark.

Packaging - considerations• 1. Is cost of package material in line

with product cost?2. Will the package be able to be reused?3. Will it protect the product through rough handling in transit and storage?4. Will it be easy to stack and display?5. Will the package provide room for good product information to "sell" the product to the consumer?6. How eye catching will it be in the marketplace?7. Will it protect the product and keep it fresh until consumer use?

COLORS

• WHITE: Pure. Clean. Youthful. It is a neutral color that can imply purity in fashion and sterilization in the medical profession.

• BLACK: Power. Elegant. Secretive. The color black can target your high-end market or be used in youth marketing to add mystery to your image.

• RED: Passion. Excitement. Danger. Red is the color of attention, causing the blood pressure and heart rate to rise. Use red to inject excitement into your brand.

• ORANGE: Vibrant. Energy. Play. Add some fun to your company if you want to create a playful environment for your customers.

COLORS

• YELLOW: Happy. Warm. Alert. Yellow can be an attractor for your business with a relaxed feeling.

• GREEN: Natural. Healthy. Plentiful. To create a calming effect or growth image choose green. Go green go.

• PURPLE: Royalty. Wise. Celebration. Maybe add some purple tones to your look for your premium service business.

• BLUE: Loyal. Peaceful. Trustworthy. Blue is the most popular and neutral color on a global scale. A safe choice for a business building customer loyalty.