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UNDERSTANDING PRINCIPLES OF MARKETING Understanding Market Processes And

Consumer Behavior Developing And Pricing Products Distributing Products Promoting Products

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tialsOUTLINE

What Is Marketing? Target Marketing/Segmentation Marketing Research Understanding Consumer Behavior Organizational Marketing & Buying Behavior International Marketing Mix Small Business & The Marketing Mix

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MARKETING MIX OF GOODS & SERVICES

Developing

Pricing

Placing

Promoting

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tialsVALUE & SATISFACTION

Benefits- Functions Of Product & Emotional Satisfaction

Benefits Must Exceed Costs To Be Of Value To The Consumer

Value = Value = BenefitsBenefits CostsCosts

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UTILITY = SATISFY NEED/WANT

Time

Place

Ownership/Possession

Form

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GOODS, SERVICES, IDEAS Consumer Goods Industrial Goods

Services- Intangible

TangibleTangible

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RELATIONSHIP MARKETING Emphasizes Economic/Social Ties Between

Buyer & Seller

Networking

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MARKETING ENVIRONMENT

The forces that directly or indirectly influence and organizations ability to undertake it business.

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MARKETING ENVIRONMENT Political/Legal- Foreign & Domestic Social/Culture- Changing Values In Today’s

Dynamic Market Technological- Obsolescence Economic- Patterns/Levels Of Spending

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CRUDE OIL PRICES-YEARLY AVERAGE

Source: “History if Illinois Basin Posted Crude Oil Prices”, http://www.ioga.com/Special/crudeoil_Hist.htm

OPEC OPEC FormedFormed

Yom Yom Kippur Kippur

WarWar

US Emphasis US Emphasis On Energy On Energy EfficiencyEfficiency

Iraq/Iran WarIraq/Iran War

Saudi Arabia Increases Saudi Arabia Increases ProductionProduction

Gulf Gulf WarWar

Import Import CutbacksCutbacks

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COMPETITIVE ENVIRONMENTSubstitute Products

Brand Competition

International Competition

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MARKETING MIX (4 P’S)

ProductProduct

PlacePlace

PricePrice

PromotionPromotion

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tialsPRODUCT

Good, Service, Idea To Fill Need Or Want

Product Differentiation

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tialsVHS VS. DVD RENTAL

Source: Video Software Dealers Association

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tialsPRICE

Price Must Create Profit By:Covering CostsAttract Customers

High-Low StrategyLow = Large Sales VolumeHigh = Greater Profit Per Unit Sold

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tialsPLACE

Getting Product From Producer To Consumer

Decisions Include:StorageMode Of Transportation

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CHANNELS OF DISTRIBUTION

ProducerProducer ProducerProducer ProducerProducer

ConsumerConsumer ConsumerConsumer ConsumerConsumer

RetailerRetailerWholesalerWholesaler

RetailerRetailer

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tialsPROMOTION

Communicate Information Tools:

AdvertisingPersonal SellingSales PromotionPublic Relations

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WEB EFFECT ONMEDIA SHOPPING

What’s the biggest way the Web has What’s the biggest way the Web has changed how you shop for media?changed how you shop for media?

Source: “Add To Cart” Wired, 10/04, p. 70.

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tialsTARGET MARKET

Target Market- Target Market- Group With Similar Needs/WantsGroup With Similar Needs/Wants

Product Positioning-Product Positioning-According To Consumers’ PerceptionAccording To Consumers’ Perception

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MARKET SEGMENTATION VARIABLES Geographic

Demographic

Psychographic

Behavioral

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GEOGRAPHIC VARIABLES Places Consumers Reside Countries > Neighborhoods Water = Boats Mountains/Rural = Four-Wheel Drive Vehicles Urban Area = Designer Clothing

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DEMOGRAPHIC VARIABLES Age Income Gender Ethnic

Background

Marital Status Race Religion Social Class Others?

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PSYCHOGRAPHIC VARIABLES Lifestyle

Interests

Attitudes

Can Be Changed By Marketing Efforts

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BEHAVIORAL VARIABLES Ways In Which Product/Service Is Used

Benefits Expected

Reasons For Purchase

Brand Loyalty vs. Switcher

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tialsMARKETING RESEARCH

Study Consumer Needs/Wants

Determine Ways Sellers Can Satisfy Needs/Wants

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MARKETING RESEARCH & PROCESS

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tialsRESEARCH PROCESS

Study SituationStudy Situation

Select MethodSelect Method

Collect DataCollect Data

Analyze DataAnalyze Data

Prepare ReportPrepare Report

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tialsRESEARCH METHODS

ObservationObservation

Focus GroupFocus GroupExperimentationExperimentation

SurveysSurveys

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INFLUENCES ONCONSUMER BEHAVIOR

Psychological Personal Social Cultural

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tialsBUYING PROCESS

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tialsDATA

Warehousing- Collecting, Storing, & Retrieving Data

Mining- Searching, Sifting, & Reorganizing Data

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ORGANIZATIONAL MARKETS Industrial

Reseller

Government/Institutional

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BUYING BEHAVIOR- ORGANIZATIONAL Buyer Differences

ProfessionalSpecialistExperts

Buyer-Seller Relationship

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MARKETING MIX- INTERNATIONAL Products- Redesign For Foreign Buyer Pricing- Cover Increased Cost Of

Transport/Selling Distribution- Delays In Establishing Network

For Startup Promotion- Cultural Differences

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MARKETING MIX-SMALL BUSINESS Products- Limited Buying Market Pricing- Incorrect Cost Estimation Distribution- Location Is Critical Promotion- Local Which Is Cheaper