Elements of Marketing
description
Transcript of Elements of Marketing
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Nature of Marketing
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Learning Targets
• Discuss the importance of marketing and its role in the economy
• Describe the factors that are part of the nature of marketing
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Supply and Demand• Producers and consumers need
information to help them make decisions
• Independent decision making = basis of free enterprise system
• Marketing activities help to match production and consumption
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What is Marketing?
• Set of activities that gets products from producers to consumers
• Definition: an organizational function and set of processes for creating, communicating, and delivering value to customers and for managing customer relationships
• Key tool in matching Supply and Demand
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Marketing as Primary Business
RETAILERS • Businesses that sell directly
to final consumers• Ex: Target, Walgreens
WHOLESALERS• Buy products from businesses
and sell them to other businesses
• Ex: lumberyardBusinesses that support:• Advertising Agencies – provide promotional services• Finance Companies– offer loans and other financial services• Transportation Companies– handle and move products
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Marketing Activities
• Buying• Selling• Transporting• Storing• Financing• Researching• Risk Taking• Grading and Valuing
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Marketing Activities Continued…
• Buying: – finding suppliers that can provide the right products,
quality & quantity at fair price• Selling:– Providing personalized & persuasive info to
customers to match needs & wants• Transporting:– Moving products from where they were
manufactured to where consumers can buy them• Storing: – Warehousing, shelves, storage room
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Marketing Activities Continued…
• Financing:– Obtaining credit when buying, extending credit
when selling• Researching:– Studying buyer interests/needs, testing products,
gathering facts needed to make good marketing decisions
• Risk Taking:– assuming risk (ex. fires, theft, damages etc.)
• Grading & Valuing:– Grouping goods according to size, quality,
characteristics and pricing appropriately
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Cost of Marketing• Sometimes higher than cost of making
product• Often 50% markup to account for marketing
activities• Necessary to attract and retain customers
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Role of Marketing• Early 1900s Product - Oriented – Little choice, inefficient manufacturing– Focus: was ‘how’ and ‘what’ to produce?
• 20th Century Sales – Oriented– More efficient manufacturing, lots of similar products– Focus: advertising and selling, widespread distribution
• Today Customer – Oriented– Needs of customer drives design, production, and
distribution of product called the “Marketing Concept”– Profit is important, but long-term success depends on
satisfying customers so they continue to buy
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ELEMENTS OF MARKETINGCHAPTER 20.2
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Learning Targets
• Describe the role of market determination• Define the basic marketing concepts and the
four elements of the marketing mix: product, price, place, and promotion
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Market Determination• Type of buyers a business wishes to attract– Gender– Age– Ethnic background– Education– Income – Occupation – Family status– Location
• Market research : study of a company’s current and prospective customers
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Market Determination
• Where to serve?– Local, state, national, international?
• TARGET MARKET– Groups of customers with very similar needs– Easier for firms to produce a product that satisfies
everyone in the group– Ex. Imagine developing a bicycle to satisfy everyone’s
needs – What might be Target Markets?• Road, mountain, BMX, commuter, 3 vs. 20 speed, cruiser,
recumbent, etc
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The Marketing Mix
• Marketing managers must focus decisions around 4 Elements of Marketing1. Product2. Price 3. Place4. Promotion
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Possible Decisions
1. Will you make the product in one size and color or in several?
2. Will you price the product high, medium, low?
3. Will you sell in stores or online?4. Will you use newspapers, radio, television, or
internet advertising?
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PRODUCT
• All attributes (tangible and intangible) customers receive in exchange for purchase price
• Strategy includes:– Number of items to produce– Physical features– Quality– Number of models and features– Packaging features– Brand name– Guarantees and services– Image to be communicated to customers about the above
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PRICE • Must be high enough to cover
production and marketing costs• Higher quality can charge higher
price• Sold for cash or credit?• Consider competitor pricing• Will you offer coupons, discounts,
promotional bonuses to attract customers?
• What price to charge companies that buy and resell product?
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PROMOTION• Providing information to
consumers that will assist them in making a decision to purchase
•How and When? -Magazines? Direct Mail? Product Demos? Trade Shows?
•What type of Info? •How much to spend on ads, displays, and other promotions?•What promotions are competitors using?
Major Methods: Advertising & Personal Selling
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Online Net Bookmark
• http://www.amazon.com• Amazon.com pioneered a new form of marketing by
developing an online store that goes beyond selling to a whole marketing system. Evaluate the Amazon.com site. Determine how Amazon.com develops relationships with its customers. Compare and contrast how Amazon.com performs the eight marketing activities discussed versus traditional stores. How likely are you to use an online store such as Amazon.com?