Understand the role marketing in business. Essential Standard 3.00 Understand the role marketing in business.

3.01- PRINCIPLES OF MARKETING “Marketers influence demand by making the product appropriate, attractive, affordable, and easily available to target consumers.” -Philip Kotler Professor Philip Kotler is widely regarded as the world’s leading expert on strategic marketing. He is currently the S.C. Johnson & Son Distinguished Professor of International Marketing at the Northwestern University Kellogg Graduate School of Management in Chicago.

ESSENTIAL QUESTIONS What is the marketing process? How do businesses use marketing process? What are the 7-Marketing Functions? What are examples of the 7-Marketing Functions?

MARKETING PROCESS Businesses are involved in the process of Creating Pricing Promotion Distribution (PLACE) of products and services. These products and services are made available in order to meet the goals of individuals and businesses. What happens during the marketing process?

Functions of marketing

7 FUNCTIONS OF MARKETING Seven functions of marketing: Marketing-information management Product/service management Pricing Place (Distribution) Selling Financing Promotion Product/service management may include several businesses involved with designing, developing, maintaining, improving, and obtaining products and services in order to meet the needs of customers. Place (Distribution) involves using the best ways for customers to locate, obtain, and use the products and services of a business. Selling involves communicating directly with potential customers in order to determine and satisfy their needs and wants. Marketing-information management involves obtaining, managing, and using information about products and services, customers, and competitors to improve business decision-making and the performance of marketing activities. Financing involves budgeting for marketing activities, securing necessary funds for operations, and providing financial assistance to customers. Pricing involves determining and communicating the value of products and services. Promotion involves communicating information such as features and prices about products and services to potential customers.

Marketing-Information Management (MIM) Obtaining Managing Using information about products and services, customers, and competitors. Helps business decision-making and the performance of marketing activities. Examples: On-line SURVEY

Marketing-Information Management (MIM) SURVEY What is your zip code? Do you agree or disagree with the following statements? Are you male or female? What is your age?

Product/ Service Management (PSM) Designing Developing Maintaining Improving Obtaining products and services in order to meet the needs of customers. Example: A Store now offers 20 ounce bottles of water instead of the 12 ounce bottles it previously sold.

Pricing Determining the value of products and services. How much will you charge to make a profit?

Place (Distribution) Ways for customers to: Locate Obtain products and services of a business. Examples: Business opens new warehouses Selling products online at Amazon or Overstock.com

Selling Communicating directly with potential customers in order to determine and satisfy their needs and wants.

Financing Example: credit Obtaining money to do business and help customers. Example: credit A company gives credit (or money ) to another company to do business.

Promotion Communicates information on products features, prices, and services to customers. Examples: Advertisements Sales Brochures that include the value, features, and benefits of hand-crafted furniture

Classification of the Main Types of Promotion continued Personalized is customized for individual customer. Mass promotion is communicated with many people with a common message. Examples of personalized promotion: visits, telephone calls, live audio and video Internet connections Types of mass promotion: advertisement, publicity, public relations, sales promotion Main types of promotion: Personalized is customized for individual customer. Mass promotion is communicated with many people with a common message. Examples of personalized promotion: visits, telephone calls, live audio and video Internet connections Types of mass promotion: advertisement, publicity, public relations, sales promotion

Importance of marketing research to the creation or improvement of products or services

Marketing Research What is marketing research? Steps in marketing research: Define the marketing problem. Study the situation. Develop a data collection procedure. Gather and analyze information. Propose a solution. What is marketing research? Marketing research involves customers in order to find solutions to problems through carefully designed studies.

Marketing Research continued Types of research studies Surveys Focus groups Observations Experiment Surveys are a specific set of questions asked to consumers. Focus groups are small groups of consumers that discuss a specific product. Observations record the actions of consumers rather than questioning them. Experiment is a comparison of two controlled alternatives for consumers.

Marketing Research continued Similarities of products and services Meet the needs or satisfaction of a target market Include a mix of the marketing elements: product, price, promotion, and place (distribution)

Marketing Research continued Differences between products and services Products Services Tangible Intangible Non-perishable or perishable Perishable Separable Inseparable Easier to market More difficult to market More control over quality Less control over quality

Selling prices of products and services

Selling Prices of Products and Services What factors influence the pricing of products and services? Pricing formula Selling price =product costs + operating expenses + profit Example: $215=67+38+100 What factors influence the pricing of products and services? Supply and demand Uniqueness Age Season Complexity Convenience

Selling Prices of Products and Services continued What is markup? Selling price = product cost + markup Example: $35+$14=$49 $35*40%=$14 What is a markdown? Markup is the amount charged of the selling price to cover the operating expenses and profit usually stated as a percent. Markdown is a reduction from the original selling price.

Classification of distribution and promotion

Classification of Channels of Distribution What is channel of distribution? How does having a channel of distribution help businesses? What is channels of distribution? The channels of distribution is how products and services reach final customers and the businesses involved. Channels of distribution allow businesses to adjust quantity and assortments accessible in convenient locations for customers and storage of products.

Classification of Channels of Distribution continued Types of channels of distribution: Direct Example-Tonya makes and sells drapes to local customers. Indirect Example-UPS delivers packages for Ann Taylor. Direct involves the exchange of products and services between producer and consumer only. Examples of direct: Local cleaning company promotes its business and provides services to its local customers. Mary sells her famous juices at the local festivals. Indirect involves the exchange of products and services with one or more business and consumer. Examples of indirect: Drugstores sell Maybelline Cosmetics. Macy’s sells Nautica line of clothing.

Classification of the Main Types of Promotion How do you know when communication is effective? What is the relationship between effective communication and promotion? Effective communication consists of an understanding of information between the sender and the receiver. The sender selects a channel of communication and the receiver indicates understanding by providing some form of feedback. What is the relationship between effective communication and promotion? Businesses use promotion to communicate with potential customers about their products and services. Information about products and services is encoded in a promotional message. Promotional messages may be delivered through advertisements and sales representatives. Potential customers decode the message and provide feedback by way of purchasing or inquiring about products or services.