CHAPTER 1Marketing Is All Around Us

WHAT IS MARKETING?

MarketingThe process of planning, pricing, promoting, selling, and distributing ideas, goods or services to create exchanges that satisfy customers

Everything that happens between the idea and the sale

IDEAS, GOODS, AND SERVICES

Ideas Politics “Living Better”

Goods Tangible items that have monetary value and

satisfy your needs and wants Services

Intangible items that have monetary value and satisfy your needs and wants

THE MARKETING CONCEPT

The idea that a business should strive to satisfy customers’ needs and wants while generating a profit for the firm.

The focus is on the customer What they want What they need What makes their lives easier

Products should be pulled onto the market by consumer wants, rather than pushed onto customers by companies There are seven functions to support this.

SEVEN FUNCTIONS OF MARKETING

SEVEN FUNCTIONS OF MARKETING

The process of deciding how to get goods in customers’ hands.

Physically moving and storing the products Truck, rail, ship or air Involves the systems

that track products

UPS Commercial

Getting the money that is necessary to pay for setting up and running a business. Loans, selling stock,

etc. Also involves ways

that customers can pay Credit cards Billing

1. Distribution 2. Financing

SEVEN FUNCTIONS OF MARKETING

Collection of information on customers, trends, and competing products Gathering, storing

and analyzing

Marketing Information Management

Pricing

How much to charge for goods and services Must consider

What will customers pay?

How much does it cost us to produce?

How much do competitors sell for?

SEVEN FUNCTIONS OF MARKETING

Obtaining, developing, maintaining and improving a product or a product mix in response to market opportunities Marketing research

helps you know what customers want

The effort to inform or persuade customers about a business’s products or services.

Product Service Management

Promotion

SEVEN FUNCTIONS OF MARKETING

Provides customers with the goods and services they want In retail stores Business-to-business (B-2-B)

Involves: Determining client needs Persuading and influencing

decisions Responding to reactions Forming relationships

Selling

ECONOMIC BENEFITS OF MARKETING

Competition fosters: New and improved products Lower Price Added value and utility

TYPES OF ADDED VALUE AND UTILITY

Utility Functions that add

value to a product

Utilities the attributes of a

product or service that make it capable of satisfying consumers’ wants and needs

Utility

Form

Place

Time

Possession

TYPES OF ADDED VALUE AND UTILITY Form

Changing raw materials or putting parts together to make them more useful

Taking things of little value and putting them together to create something of use (zipper + buttons + cloth + thread = jacket)

Place Having your product in places people can easily buy

Time Having a product available at desirable and convenient times of

year or day Possession

The exchange of a product for money Ways consumers can pay (cash, credit card, layaway, PayPal)

Information Communicating with the consumer

Salespeople Packaging and Labeling Advertising

FUNDAMENTALS OF MARKETING

Market All of the people who share similar needs and

wants and who have the ability to purchase a given product Are you part of the videogame market? Are you part of the sports car market?

Consumer Market vs Industrial Market Consumer Market

Consists of consumers who purchase goods and services for personal use

Industrial market (or Business-to-business) Includes all businesses that buy products for use in

their business operations

MARKET SHARE

Total market Can also be

described by the total sales in a product category

Market Share A company’s

percentage of the total sales volume generated by all companies that compete in a given market.

GoogleYahoo

Bing

AskAOL 2010

Google

Yahoo

Bing

Ask

AOL

Google

YahooOther

Ask

AOL

MSN

2005 GoogleYahooOtherAskAOLMSN

Search Engine Market Share

Market anyone who has the desire and the means to buy

Market anyone who has the desire and the means to buy

Market Segments Small groups of people within the market

Market anyone who has the desire and the means to buy

Market Segments Small groups of people within the market

Target Market The group chosen for a specific marketing program

Target Market:Males, Ages 14-20

Market anyone who has the desire and the means to buy

Market Segments Small groups of people within the market

Target Market The group chosen for a specific marketing program

Target Market:Males, Ages 14-20

CERTAIN PRODUCTS HAVE MORE THAN ONE TARGET MARKET

Men – too much hassle to make coffee

Women – you will feel like working out for a change

1. Your product might have different groups of users

Who is 5-hour Energy Targeting?

CERTAIN PRODUCTS HAVE MORE THAN ONE TARGET MARKET

Consumers – the people consuming or using the product

Customers – the people who are buying the product

2. Your product might have different group who purchases than who consumes

Moms KidsWhat features on this package target Moms and what features

target kids?

MARKETING MIX (4 P’S)

The activities that go into the selling of a product

MARKETING MIX Product

Product Features Packaging Brand Name Different versions or

flavors Place

Where product is distributed Physical location Stores sold in Where within the store

Is it available online or direct?

Price What is exchanged for

the product What do I have to sell a

product for to make a profit?

What psychological impacts does a low or high price have?

Promotion Decisions about

advertising, selling, discounts and publicity