introduction to business © thomson south-western chapter 10 slide 1 lesson 10-1 lesson 10-1...

Chapter 10

Slide 1Introduction to Business

© Thomson South-Western

LESSON 10-1LESSON 10-1

Marketing Basics

Goals Define important marketing concepts. Identify the steps in a marketing

strategy. Describe the consumer decision-

making process.

Chapter 10



Marketing is the process of planning and

executing the conception, pricing, promotion and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives

Chapter 10



UNDERSTAND MARKETING

Marketing activities Advertising Brand names on clothes & packages Websites for products Warehousing Distributing Credit functions Gathering customer data

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Chapter 10



UNDERSTAND MARKETING Marketing businesses

Ad agencies Market research firms Transportation cos.

Trucking Ups Dhl FedEx

Financial services Banking, credit

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MARKETING FUNCTIONS

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>> C H E C K P O I N T

Define marketing and the seven marketing functions.

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MARKETING STRATEGY

Marketing planning Satisfying customer needs better than competitors

Develop a successful marketing strategy Identify a target market

Consumers who have similar wants & needs

Create a marketing mix A blending of the 4 P’s

Product, Place( distribution), Price, Promotion

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Develop a successful Marketing StrategyMarketing Orientation

Consider the needs of customer when developing the marketing mix. Don’t assume you know customers

wants.

Research Cruise ship example pg. 240

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UNDERSTAND CUSTOMERS

Two typesFinal consumerBusiness consumer

Consumer decision-making5 Steps

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STEPS IN THE CONSUMER DECISION-MAKING PROCESS

1.1. Recognize a need.

2.2. Gather information.

3.3. Select and evaluate alternatives.

4.4. Make a purchase decision.

5.5. Determine the effectiveness of the decision.

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Buying MotivesWhat motivates you to buy?

Emotional Gifts for loved ones Security

Rational Logic

Cars College costs

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Develop Effective Products and Services

Goals Justify the importance of marketing

research. Identify the components of a product. Describe how services differ from

products.

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CREATE AND IMPROVE PRODUCTS

3 possibilities1. Totally new products

2. Major improvements in existing products

3. Minor improvements in existing products

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PLAN MARKETING RESEARCH

Steps in marketing research1.1. Define the marketing problem.

2.2. Study the situation.

3.3. Develop a data collection procedure.

4.4. Gather and analyze information.

5.5. Propose a solution.

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TYPES OF RESEARCH STUDIES

SurveysFocus groupsObservationsExperiments

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PRODUCT PLANNING

Parts of a product Basic product Features (options)

Enhancement to basic product Cell phones

Brand names Packaging

Identifiable Easy to grab

Warranty

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PRODUCT PLANNING

Product planning procedures Idea development Idea screening Strategy development Production and financial planning Limited production and test marketing Full-scale production

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SERVICES Inseparable

Activities that are consumed at the same time they are produced.

Intangible No physical form

Perishable Must meet the needs at the time needed

Heterogeneous Different in type and quality provided

Uniqueness of customer and person providing service

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Price and Distribute Products

Goals Discuss how the selling price of a

product is calculated. Differentiate between a direct and an

indirect channel of distribution.

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VALUE AND PRICE

Buyers usually want to pay the lowest price possible.

Sellers want to charge the highest price possible.

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PRICING FACTORS

Supply More means less Less means more

and demand More means more Less means less

Uniqueness competition

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PRICING FACTORS

Age Old means less New means more

Season AC’s in winter

Buy off-season

Complexity Convenience

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PRICE A PRODUCT Selling price

What we pay Product costs

Costs to produce or buy the product by producer Operating expenses

Overhead Salaries, wages, rent, utilities, etc.

Profit What’s left after all costs are paid

Gross margin Difference between SP & Costs Before OE.

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PRICE A PRODUCT

Sellingprice

=Product

costs+

Operating expenses

+ Profit

GrossMargin

=Sellingprice

+Product

costs

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PRICE A PRODUCT

Markup Usually expressed as a % of costs 100% means double the costs

Markdown Also a %

Start small then grow

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CHANNELS OF DISTRIBUTION

Need for distribution channels Differences in quantity Differences in assortment Differences in location Differences in timing

We try to even all these out

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Channels and channel members

Businesses takeover the channels when consumers don’t want to.

Example You can go and buy produce at a produce

stand during the growing season for it. In winter in the LV, not a lot available. Someone took over getting us our produce. Not just Giant, Wegmans, or Weis

Trucking cos., wholesalers, etc.

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Channels of Distribution

Direct Producer to consumer

Examples?? Road-side stands Dell Computers

Indirect One or more business help get it to consumer

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Plan Promotion

Goals Justify the importance of

communication in marketing. Identify and describe the common types

of promotion.

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COMMUNICATION

Communicating through promotion The way businesses communicate with us

Ads Radio, TV, Internet, Print (Mags, Newspapers)

Salespeople Telemarketing Cold-calling

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PERSONALIZED PROMOTION

Personal selling New cell phone example page 257 Best and Costliest Cold-calling Telemarketing Internet

Usually for more expensive products. More preparation by salesperson

On products On customer

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MASS PROMOTION

Less expensive Less effective

TIVO Long-lasting effects PR

Favorable objectives Publicity (Image)

Not asked for Free Can be good or bad

COUPONS GAMES CONTESTS

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MASS PERSONALIZATION

COMBO OF BOTHSurveysWeb linksFAQ

introduction to business © thomson south-western chapter 10 slide 1 lesson 10-1 lesson 10-1...

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