©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Nature and Scope of Marketing Nature of Marketing Elements of Marketing Marketing Plan CHAPTER 20

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Nature of Marketing GOALS ● Discuss the importance of marketing and its role in the economy. ● Describe the factors that are part of the nature of marketing. 2 CHAPTER 20

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Importance of Marketing ● Marketing—a set of activities that gets products from producers to consumers ● Marketing activities help match productions and consumption ● Effective marketing creates and maintains relationship between sellers and buyers ● Retailers—businesses that sell directly to final consumers ● Wholesalers—businesses that buy products from businesses and sell them to other businesses 3 CHAPTER 20

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Importance of Marketing ● The role of the marketing manager ● Coordinate marketing functions across departments to meet customer needs ● Marketing jobs include: advertising, sales promotion, customer service, credit, and insurance ● 1/3 of people employed in US work in a marketing job or marketing business 4 CHAPTER 20

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e ©2013 Cengage Learning. All Rights Reserved. Marketing’s Role in Top Management 5 CHAPTER 20

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e ©2013 Cengage Learning. All Rights Reserved. Nature of Marketing ● Marketing activities ● Buying ● Selling ● Transporting ● Storing ● Financing ● Researching ● Risk taking ● Grading and valuing 6 CHAPTER 20

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e ©2013 Cengage Learning. All Rights Reserved. Nature of Marketing ● Cost of marketing ● Approximately ½ or more than ½ of the price you pay for a product may result from the marketing expenses ● Role of marketing ● Production-oriented—decisions about what and how to produce received the most attention ● Sales-oriented—emphasize widespread distribution and promotion to sell their products ● Customer-oriented—activities directed towards satisfying the customers 7 CHAPTER 20

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Elements of Marketing GOALS ● Describe the role that market determination plays in marketing. ● Define basic marketing concepts and the four elements of the marketing mix. 8 CHAPTER 20

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Market Identification ● Market—refers to the types of buyers a business whishes to attract and where those buyers are located ● Whom to serve ● Business identifies potential customers based on population and characteristics ● Cost wise, unwise to try to reach all potential customers 9 CHAPTER 20

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Market Identification ● Where to serve ● Find best marketing location to achieve most sales for its marketing dollar 10 CHAPTER 20

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Market Identification ● Identifying target markets ● Market research—study of a company’s current and prospective customers ● Companies spend time on market research before they begin product development ● Target markets—groups of customers with similar needs to whom the company plans to sell its product 11 CHAPTER 20

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e ©2013 Cengage Learning. All Rights Reserved. Positioning Chart for Target Markets for Bicycles 12 CHAPTER 20

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e The Marketing Mix ● Marketing mix– the blending of the four elements of: 1. Product 2. Price 3. Distribution (place) 4. Promotion 13 CHAPTER 20

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e The Marketing Mix ● Product—both tangible and intangible, customers receive for the purchase price ● Price—the amount of money given to acquire a product ● Difficult marketing decision 14 CHAPTER 20

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e The Marketing Mix ● Distribution (place)—set of activities required to transport and store products ● Place utility—the product must be in a place where customers need or want it ● Also includes actual physical handling of the product ● Promotion—providing information to consumers to assist them in making a decision ● Advertising and personal selling 15 CHAPTER 20

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Marketing Plan GOALS ● Describe the role of a marketing plan. ● Explain the four stages of the product life cycle. ● Identify the consumer goods classifications. 16 CHAPTER 20

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Developing a Marketing Plan ● Marketing plan—detailed written description of all marketing activities that a business must accomplish in order to sell its products; written for a specific time period, often one year 17 CHAPTER 20

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e The Product Life Cycle ● Products move through predictable stages through their product lives ● Both profits and sales decline as newer products replace old ones 18 CHAPTER 20

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e The Product Life Cycle ● Introduction stage ● Brand-new products enter the market ● Growth stage ● Customers like the new products, more customers become regular purchasers 19 CHAPTER 20

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e The Product Life Cycle ● Maturity stage ● The product is competing with other brands with very similar features ● Companies emphasize promotion ● Brand name, packaging, specific image, price ● Decline stage ● A new product is introduced that is better and easier to use 20 CHAPTER 20

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e ©2013 Cengage Learning. All Rights Reserved. Product Life Cycle 21 CHAPTER 20

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Product Categories ● Industrial goods—products designed for use by another business ● Consumer goods—products designed for personal or home use 22 CHAPTER 20

©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Product Categories ● Types of consumer products ● Convenience goods—inexpensive items that consumers purchase regularly without a great deal of thought ● Shopping goods—products consumers buy less frequently, usually have a higher price ● Specialty goods—products customers insist on having and willing to search for ● Unsought goods—customers do not shop for some products because they do not have a strong need for them 23 CHAPTER 20