marketing. what is marketing? the process of creating, promoting, and presenting a product to meet...

MARKETING

WHAT IS MARKETING?

The process of creating, promoting, and presenting a product to meet the wants and needs of consumers.

HOW DO COMPANIES KNOW WHICH GROUP OF PEOPLE TO TARGET THEIR PRODUCT TO?

They do detailed research on potential customers. This research is called

TARGET MARKETING.

Target Marketing is used by companies to help:

(1) find potential customers for a product already created and (2) analyze the customers to create advertising that will

influence them.

There are many careers that involve marketing,

i.e.

Market ResearcherAverage Earnings $60,260

Market researchers collect, analyze and interpret data on consumer preferences and public attitudes towards issues.

Promotions ManagerAverage Earnings $62,260

Promotions managers are commonly found at radio stations. At small stations, like college radio stations, they may handle all the station publicity, publish the programming guides and manage the giveaways. At larger stations, they handle promotions on a much larger scale, but they may have assistants and writers who support their efforts.

Customer Service RepAverage Earnings $24,960

A customer service representative is a vital link between the customer and the company or organization. Many don’t work in stores or for

companies and can be very stressful at times.

Marketing involves more than just creating advertisements or

researching consumer demographics.*************

Before a product is sold, companies have to consider several questions.

These questions involve the four elements of marketing which is

known as the

MARKETING MIX

THE MARKETING MIXaka

(The Four P’s of Marketing)

1.Product2.Place3.Price4.Promotion

PRODUCT• The first process involved in

marketing is deciding whether or not there is a demand for a product.

• If there is a demand for the product, marketers have to decide how to package the product and present the product in the most appealing way.

MARKET RESEARCH

Market research is the process of gathering and studying information about the buying

habits of consumers to determine WHAT GOODS

ANDSERVICES

TO PRODUCE.

Market Research involves analyzing facts about

consumers. These facts include age, gender, location, income, and

education. This information is called DEMOGRAPHICS.

If Hollister wanted to design and sell a new product, they would first decide what group of people they want to design a product for by evaluating

the demographics of their consumers.

Which demographic are these products aimed at?

FOCUS GROUPS

are a group of people gathered together to answer questions and offer

their opinions about a product.If a company wanted teenager’s opinions they would have a focus

group full of teens.

Before producers decided exactly what to design and sell, they would gather

focus groups together to get their opinion.

The Merchants of Cool

• http://www.pbs.org/wgbh/pages/frontline/shows/cool/view/

Participating in a focus group may go something like

this:

Which design would be more popular?

Hoodie Jacket

Which design would be more popular?

T Shirt Dressy Top

Which design would be more popular?

Long Sleeved Blouse Long Sleeved T Shirt

Which design would be more popular?

Plain T Shirt Design on T Shirt

Which design would be more popular?

Solid Color Polo Shirt Striped Polo Shirt

Which design would be more popular?

Scoop Neck Straight Neck

Which design would be more popular?

Tie No Tie

Camo Shorts Plaid Shorts

Which design would be more popular?

Which design would be more popular?

Pants Shorts

Which design would be more popular?

Dark Jeans Light Jeans

Which design would be more popular?

Jeans with holes No Holes in Jeans

Which design would be more popular?

Wide Leg JeansSkinny Jeans

Which design would be more popular?

Scarf Necklace

Which design would be more popular?

Baseball Hat Beanie

Which design would be more popular?

Worn Hat New Hat

Which design would be more popular?

Casual Flip FlopsLeather Flip Flops

Which design would be more popular?

High Heels Flats

Which design would be more popular?

Skater ShoesBasketball Shoes

Which design would be more popular?

Sandals Sneakers

What’s After Market Research & Designing a Product?

(Well, it’s back to the Marketing Mix or the 4 P’s of Marketing.)

1.Product2.Place3.Price4.Promotion

PLACEAfter a company decides on a product they want to sell, they have to decide where they want to sell it, i.e.

• Would you sell snowshoes in Hawaii or Alaska?

• Would you sell lawn mowers in the Sahara Desert or in Utah?

PLACE(cont.)

Once companies decide where to sell their product they have to decide how to get their product to the consumers. This is called a CHANNEL OF DISTRIBUTION.

Companies make a product in a factory somewhere, but how do they get it from the factory to the consumer?

TWO TYPES OF CHANNELS OF DISTRIBUTION

• Direct Distribution: When goods are sold directly from the producer/manufacturer to the customer.

• Indirect Distribution: When goods are sent to intermediaries before getting to the customer.

IntermediariesIntermediaries are people who help distribute the product to the consumers. There are several different kinds of intermediaries but we are going to focus on three types.

3 Types of Intermediaries

1.Manufactures/Producers

2.Wholesalers

3.Retailers

Manufactures/Producers

via the InternetManufactures/Producers

sometimes decide to sell the product they produce themselves.

This usually doesn’t involve an Intermediary except when the Manufacturer/Producer uses the Internet to help get the product to the consumers.

The Internet then becomes the Intermediary.

It can save the consumer money to buy a product off the Internet.

***************However, sometimes it is costly for a

company to hire people to take Internet orders, ship products,

collect money, etc. ***************

So instead they hire someone else to get their product to the consumer.

The people they hire are called Wholesalers.

WholesalersReceive large shipments of products from many producers/manufacturers.

They divide the shipment up and send the products to stores/retailers so they can sell the products.

RetailersSell goods directly to the public like grocery stores or department stores.

Retailers can get goods from either the producers/manufacturers or from wholesalers.

Intermediary Activity

Which Place Would Be Best?• Welcome to Newtown. It sits 25 miles from

Commerce Town, 10 miles away from Friesner Airport, and 35 miles away from Poshbury.

• Floor-Mart are considering where to put their new store. Their store will sell groceries and provisions 24 hours a day (at a premium price of course). They have three options, each one is considered on the next slides. You need to recommend a place for the position of the new store.

Here is a map of the area……

SITE #1• This site is next to Commerce Town. It

has very few inhabitants. However 7,000 people travel there everyday to go to work. It already has a competing store (C). There are plans to build low cost housing in the area.

SITE #2• This site is very close to the exclusive

Poshbury. It has 1,000 very exclusive, wealthy inhabitants. There is no competition in the locality.

SITE #3• This site is close to Newtown. However

the 7,000 of the 10,000 citizens of Newtown work in Commerce Town and spend little time at home during the working week. This site is some 5 miles away from Newtown and 4 miles away from the growing Friesner Airport. It is situated on the only road between Friesner airport and Newtown.

One more look at the map……

SOLUTION• Commerce Town has very few houses. Most of the people

that visit it are working. However this could be an advantage if people went shopping during their lunch or after work. There is a competitor in the locality. The future will see a new low cost housing, so there is potential for the long-term.

• If Floor-Mart were to locate here there would be no competition. The problem with this location is the lack of inhabitants. With Poshbury being so exclusive, further building is unlikely.

• The final location is has a large population. It is also on the main route between Newtwon and the growing Friesner Airport. People could shop on their return from work since Floor-Mart is open for 24 hours every day.

Option 3is the preferred option, followed closely by option

1.

What’s After Deciding on the PLACE to Sell Your Product?(Well, it’s back to the Marketing Mix or

the 4 P’s of Marketing.)

1.Product2.Place3.Price4.Promotion

PRICEAfter a company

decides what product to create

and where they are going to sell it

(place), they have to decide what price

they are going to sell the product for.

Setting the price of a product is critical. If the

price is too high, no one will buy it. If the price is too low, the company won’t make any

money.

3 Questions to Determine the Price of the Product

1. How much are customers willing to pay?

2. Is the price competitive with other similar products?

3. Can the company make a profit?

Is the Price Right?http://pbskids.org/dontbuyit/buyingsmart/price_flash.html

Just because something costs more, does it mean it is a better

product?• NO!!!!!!!!!• Many companies charge

more for a product just because they have a popular name brand.

• Bottled water for Dasani, a Coca-Cola product, costs more than buying a generic brand of water.

The Cost of

Coolhttp://pbskids.org/dontbuyit/buyingsmart/costofcool.html

What’s After Deciding on the PRICE For Your Product?

(Well, it’s back to the Marketing Mix or the 4 P’s of Marketing.)

1.Product2.Place3.Price4.Promotion

PROMOTIONPromotion is

making consumers aware of a product.

Some Types of Promotion

•Personal Selling•Sales Promotion•Advertising

–Direct Mail

•Public Relations•Publicity

Personal Selling• One-on-one interaction between a

representative of a company and a customer.• Involves a salesperson selling the product on

behalf of the company. • Salespeople are trained on how to approach

potential customers and the techniques of making a sale.

• Salespeople are expensive so companies only use them if they are going to make a large profit on the sale.

• Examples: Car Salesman& Avon Lady

Sales Promotion• Any promotion offering a special deal.

• Companies have to decide if it is worth offering a special deal or instead use the money to pay for advertising.

• Examples include– Buy one get one free– Coupons– 10% off– Free blade replacements with purchase of a

razor– Free Shipping

Advertising• Communication with consumers that is paid for.

It is used to develop attitude, create awareness, and transmit information to consumers.

• Places companies can buy ad space include:– Newspapers– Magazines– Television– Billboards– Radio– Sides of Buses– During Movie Previews– Direct Mail

AdvertisingDirect Mail

• Involves sending out mail to specific groups of people.

• Companies keep databases of people and their information like addresses and phone numbers. They use the database to find people with similar characteristics and choose to mail flyers/information to them.

• For example: Residents of Kaysville may get “Our Town” ads which are ads for stores in the surrounding area. If you are a medical school student you would get flyers or catalogs about medical supplies.

Public Relations• Public Relations (sponsorship) is when an

company pays to be associated with a specific event.

• For example:– Reebok will pay professional basketball players

to wear their products when they play.– Cheerios sponsors a NASCAR race car.

Publicity• Does not cost the company anything.• Can be positive or negative for the

company.• The company has no control over

content.• Companies often use Public Relations

experts to control publicity for their company/product.

Advertising Tricks

•Companies use many tricks to convince people to buy their product.

•Sometime they work, sometimes they don’t!

Hot or SnotDid it Sell?

http://pbskids.org/dontbuyit/buyingsmart/hotorsnot.html

Music & Advertising• Music is very effective in making

advertisements more memorable.• Many slogans are set to music so people

are more likely to remember them• For example:

– Plop, Plop, Fizz, Fizz– Two all beef patties, special sauce,

lettuce, cheese, pickles, onions on a sesame seed bun. (One of McDonalds old slogans)

Money & Music

http://pbskids.org/dontbuyit/entertainment/makingmusic.html

• http://www.iceagemovie.com/index.html