Marketing EssentialsChapter 13

Basics Of Marketing

MARKET: a group of customers who share common wants and needs

• Can be individuals or a country as a whole

MARKETING: process of creating, promoting, and presenting a product or service to meet the wants and needs of consumers

Marketing different products requires different

strategies!

Functions of Marketing (7)

1. DISTRIBUTION: the process of getting goods and services to customers• Purchasing, stock handling, inventory control, and physical distribution

2. FINANCING: getting the money that is necessary for setting up and running a business

3. MARKETING INFORMATION MANAGEMENT: gathering and analyzing information about consumers, trends, and competitors’ products

Functions (Continued)4. PRICING: Deciding how much to charge for a

product/service.

5. PRODUCT/SERVICE MANAGEMENT: obtaining, developing, maintaining, and improving a product in response to market opportunities.

6. PROMOTION: effort to inform, persuade, or remind potential customers about a business’s products or services.

7. SELLING: providing customers with the goods/services they choose to buy.

The Marketing Mix – the 4 P’sMARKETING MIX- the 4 basic marketing strategies

1. PRODUCT: a) Is there a demand for a product? b) How can I make the product appeal to customers (packaging)?

What holiday(s) do you think the demand for SNICKERS® might increase?

Do you think the SNICKERS® packaging is appealing? Why or why not?

The Marketing Mix (continued)

2. PLACE: a) How will customers buy their product? b) Where will customers buy the product/service?

CHANNEL OF DISTRIBUTION: pathway to direct products to consumers 2 TYPES

Are SNICKERS® sold directly or indirectly?

DIRECT DISTRIBUTION: sold from producer directly to customers

Example: farmer to YOU!

INDIRECT DISTRIBUTION: one or more intermediaries (distributors, wholesalers, or retailers)

Example: farmer to HyVee to YOU!

Marketing Mix (Continued)

3. PRICE: a) What are customers willing to pay?b) Is the price competitive with other products?c) Can the company make a profit?

BREAK-EVEN POINT: point at which…total revenue/sales =the total costs/expenses of developing and offering the product/service

Marketing Mix (Continued)

4. PROMOTION: a) How will customers be aware of a product?• Advertising, discounts/coupons, rebates, sales, give away items

Where does SNICKERS® advertise?

Marketing Mix (Continued)

5. 5th New Element: PEOPLE: Good employees and customers

Market ResearchMARKET RESEARCH: gathering and analysis of information on the size, location, and makeup of a market.• Market research helps businesses discover

consumers’ wants & needs!

DEMOGRAPHICS: facts about the population• Age• Gender • Location• Income

What are your demographics?

Market Research

TARGET MARKETING: focus on the people most likely to buy the products/services

Example: Gatorade’s target market is active youth

What is SNICKERS®’ target market?

Market Research

MARKET SEGMENTATION: division of a market for a product into groups of customers who have the same needs and traits

Example: a product that generally is marketed to adult males (let’s say men’s deodorant) might be presented differently on the country music channel than it would be on a sports channel

Product Development (7 Steps)

1. GENERATE IDEAS: • Product development/market research

2. SCREEN IDEAS:• Does the product fit the company?• Does it compete with existing company products?

3. DEVELOP A BUSINESS PLAN:• Written proposal that includes estimated sales, costs, profit

potential, market trends, and competing products

Product Development (continued)4. DEVELOP THE PRODUCT:• Prototype: model of the actual product

- tests how it can be made, if changes need to be made

5. TEST-MARKET THE PRODUCT:• Offer in a limited market for a limited time• Collect customer responses if they like the product• Disadvantage: competitor can have time to develop similar product!

6. INTRODUCE THE PRODUCT: • Publicity campaign to introduce product• Launch of new product cost can be high

Product Development (continued)7. EVALUATE CUSTOMER ACCEPTANCE:• Track customer responses to product• What new products are they buying?

PRODUCT FAILURES: not all products succeed!