BA 101 Introduction to Business

Chapters 12-13-14-15Marketing Function

What is Marketing?

IndividualIndividualObjectivesObjectives

OrganizationalOrganizationalObjectivesObjectives

ConceptionConception PricingPricing PromotionPromotion DistributionDistribution

IdeasIdeas ServicesServices GoodsGoods

Core Marketing Concepts

Goods and Services

Value, Qualityand SatisfactionExchange, Transaction

and Relationships

Needs, Wants,and Demands

Markets

Selling Concept vs. Marketing Concept

StartingPoint

Focus Means Ends

ExistingProductsFactory

Selling andPromoting

Profits ThroughSales Volume

CustomerNeedsMarket

IntegratedMarketing

Profits ThroughCustomer Satisfaction

The Selling Concept

The Marketing Concept

Customer Satisfaction

Positive Customer Experiences

Negative Customer Experiences

Greater customer loyalty

Positive “word of mouth”

More sales opportunities

Less price sensitivity

Damaged business reputation

Negative “word of mouth”

Fewer sales opportunities

Reduced business prospects

Understanding Today’s Customers

SophisticatedSophisticated

Price SensitivePrice Sensitive

DemandingDemanding

InformedInformed

Understanding Today’s Customers

Organizational MarketOrganizational Market Consumer MarketConsumer Market

Industry/CommerceIndustry/CommerceIndustry/CommerceIndustry/Commerce

ResellersResellersResellersResellers

GovernmentGovernmentGovernmentGovernment

IndividualsIndividualsIndividualsIndividuals

FamiliesFamiliesFamiliesFamilies

HouseholdsHouseholdsHouseholdsHouseholds

Marketing ResearchMarketing ResearchMarketing ResearchMarketing Research

How can we use information for marketing purposes?

How can we use information for marketing purposes?

Develop the Marketing Strategy

Segments and NichesSegments and Niches

Market PositionMarket Position

Target MarketsTarget Markets

Marketing MixMarketing Mix

Developing the Marketing Mix

Social ResponsibilitySocial Responsibility

Social ResponsibilitySocial Responsibility

Bus

ines

s Et

hics

Bus

ines

s Et

hics

Business Ethics

Business Ethics

PromotionPromotionPlacePlace

PricePriceProductProduct

CompetitionCompetition EconomicsEconomics

NatureNature

PoliticsPoliticsRegulationRegulationTechnologyTechnology

SocietySociety Target Market

Product: It is a combination of benefitsProduct: It is a combination of benefits

Core BenefitsCore Benefits

Brand Name Features

QualityLevel DesignPackaging

Installation Warranty

Upgrades Accessories

Deliveryand Credit

After-SaleService

The Product Continuum

GoodsProducts

IdeasServices

Salt Shoes VCR Auto FastFood

Cruise Consulting EducationInsurance

TangibleDominant

IntangibleDominant

Characteristics ofService Products

IntangibleIntangibleQualityQuality

IntangibleIntangibleQualityQuality

PerishablePerishableNatureNature

PerishablePerishableNatureNature

TimeTime

IntroductionIntroduction GrowthGrowth MaturityMaturity DeclineDecline

In-FlightInternetService

Digital MusicPlayers

DVD Players VCRs

++00

Sal

es V

olum

e (u

nits

)S

ales

Vol

ume

(uni

ts)

Sales

Profits

The Product Life CycleThe Product Life Cycle

• New-to-the-world products

• New product lines • Additions to existing

product lines • Improvements or

revisions of existing products

• New Product Development (NPD)

New ProductNew Products and NPDs and NPD

Product Lineand Product Mix

MeatMeatMilkMilk Fruit JuiceFruit Juice

MeatballsMeatballs

SausagesSausages

Product Line

Product Mix

SalamiSalami

Developing Pricing Strategies

QualityQualityPerceptionsPerceptions

QualityQualityPerceptionsPerceptions

MarketingMarketingObjectivesObjectivesMarketingMarketingObjectivesObjectives

ConsumerConsumerDemandDemand

ConsumerConsumerDemandDemand

GovernmentGovernmentRegulationsRegulations

GovernmentGovernmentRegulationsRegulations

Break-Even Analysis

Break-EvenPoint $$ Profits $$

More Than

$$ Losses $$

Less Than

Fixed costs

Selling price per unit-Variable costs per unit

Cost-Based PricingCost-Based Pricing

Break-Even Point Haircuts at $20 Each

Break-Even Point Haircuts at $30 Each

Other Pricing Strategies

Price-BasedPrice-Based

OptimizationOptimization

SkimmingSkimming

PenetrationPenetration

Marketing Intermediaries

RetailersRetailers WholesalersWholesalers

How Intermediaries Simplify Commerce

Distribution Channel Length

ConsumerConsumer

ConsumerConsumer

ConsumerConsumer

ConsumerConsumer

Business User

Business User

BusinessUser

BusinessUser

Consumer Goods and Services

Business Goods and Services

ProducerProducer

ProducerProducer

ProducerProducer

ProducerProducer

ProducerProducer

Agent/BrokerAgent/Broker

WholesalerWholesaler

WholesalerWholesaler

RetailerRetailer

RetailerRetailer

RetailerRetailer

ProducerProducer WholesalerWholesaler

Market Coverage

Distribution

Convenience Goodsand Organizational Supplies

Expensive Technicalor Specialty Products

Intensive Selective Exclusive

Elements of Promotion

Personal sellingPersonal selling

AdvertisingAdvertising

Direct marketingDirect marketing

Sales promotionSales promotion

Public relationsPublic relations

The Promotional Mix

Activity Reach Timing FlexibilityCost/

Exposure

Personal Selling

Advertising

DirectMarketing

SalesPromotion

PublicRelations

Direct InteractionLimited Reach

Indirect InteractionLarge Reach

Direct InteractionLarge Reach

Indirect InteractionLarge Reach

Indirect InteractionLarge Reach

Regular Contact

Regular Contact

Intermittent

Intermittent

Intermittent

TailoredMessage

Standard Message

CustomizedMessage

StandardMessage

StandardMessage

Relatively High

Low to Moderate

Relatively High

Varies

No Direct Cost

Personal Selling

Customer-OrientedMarketing

Customer-OrientedMarketing

Partnerships withCustomers

Partnerships withCustomers

Product AwarenessProduct AwarenessProduct AwarenessProduct Awareness

Product ImageProduct ImageProduct ImageProduct Image

Consumer DemandConsumer DemandConsumer DemandConsumer Demand

Advertising and Direct Marketing

Major Advertising Media

NewspapersNewspapers

E-mailE-mail

TelevisionTelevision Direct MailDirect Mail

InternetInternetMagazinesMagazinesRadioRadio

OutdoorOutdoor

Consumer Sales Promotions

CouponsCoupons

RebatesRebates

Point-of-PurchasePoint-of-Purchase

Special-Event AdvertisingSpecial-Event Advertising

SamplesSamples

PremiumsPremiums

Cross-PromotionsCross-Promotions

Specialty AdvertisingSpecialty Advertising

Public Relations

NewsConferences

NewsReleases

CommunityRelations

PressRelations

InvestorRelations

GovernmentAffairs

Product Publicity

Integrated Marketing CommunicationsIntegrated Marketing Communications

IMCIMCIMCIMC

PublicPublicRelationsRelations

PersonalPersonalSellingSelling

ProductProductAdvertisingAdvertising

DirectDirectMarketingMarketing

SalesSalesPromotionPromotion

EffectivenessEffectiveness

ConsistencyConsistency

Imp

act

Imp

actC

lari

tyC

lari

ty