Marketing CHAPTER 10 10-1 Marketing Basics 4/23/2017 CHAPTER 10 Marketing 10-1 Marketing Basics 10-2 Develop Effective Products and Services 10-3 Price and Distribute Products 10-4 Plan Promotion ITB

10-1 Marketing Basics Goals Define important marketing concepts. CHAPTER 10 4/23/2017 10-1 Marketing Basics Goals Define important marketing concepts. Identify the steps in a marketing strategy. Describe the consumer decision-making process. ITB

Key Terms marketing marketing strategy target market marketing mix CHAPTER 10 4/23/2017 Chapter 10 Key Terms marketing marketing strategy target market marketing mix marketing orientation final consumers business consumers consumer decision-making process buying motives ITB

UNDERSTAND MARKETING Marketing activities Marketing businesses CHAPTER 10 4/23/2017 Chapter 10 UNDERSTAND MARKETING Marketing activities Marketing businesses Marketing functions ITB

CHAPTER 10 4/23/2017 Chapter 10 Marketing Functions ITB

CHAPTER 10 4/23/2017 Chapter 10 Checkpoint >> Define marketing and the seven marketing functions. Answer Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders. The seven marketing functions include product and service management, distribution, selling, marketing information management, financial analysis, pricing, and promotion. ITB

MARKETING STRATEGY Marketing planning CHAPTER 10 4/23/2017 Chapter 10 MARKETING STRATEGY Marketing planning Develop a successful marketing strategy Identify a target market Create a marketing mix ITB

Chapter 10 TARGET MARKET Specific group of consumers who have similar needs and wants Proctor & Gamble http://www.pg.com/en_US/index.shtml

Chapter 10 http://www.esmalloffice.com/SBR_template.cfm?DocNumber=PL12_2000.htm

Chapter 10 MARKETING MIX PRODUCT- includes the basic (or simplest form) product, features, options, brand name, packaging guarantee/warranty, PRICE- the $ a customer must pay for a product or service PLACE- distribution (channels of distribution) and placement PROMOTION- promotion, personal selling, and advertising

CHAPTER 10 4/23/2017 Chapter 10 Checkpoint >> What are the two steps in developing a marketing strategy? Answer 1. Identify your target market 2. Develop your marketing mix. ITB

UNDERSTAND CUSTOMERS Consumer decision-making (next slide) CHAPTER 10 4/23/2017 Chapter 10 UNDERSTAND CUSTOMERS Consumer decision-making (next slide) Buying motives Emotional Purchases based on feelings, beliefs, and attitudes Rational Purchase decisions guided by facts and logic ITB

STEPS IN THE CONSUMER DECISION-MAKING PROCESS CHAPTER 10 4/23/2017 Chapter 10 STEPS IN THE CONSUMER DECISION-MAKING PROCESS 1. Recognize a need. 2. Gather information. 3. Select and evaluate alternatives. 4. Make a purchase decision. 5. Determine the effectiveness of the decision. ITB

Assessment page 242>> CHAPTER 10 4/23/2017 Chapter 10 Assessment page 242>> 1-3, and 4 or 5 Then read Chapter 10-2 starting on page 243 and complete questions on page 248 (1-3, and 4 or 5) ITB

Develop Effective Products and Services CHAPTER 10 4/23/2017 10-2 Develop Effective Products and Services Goals Justify the importance of marketing research. Identify the components of a product. Describe how services differ from products. ITB

Key Terms marketing research product services intangible inseparable CHAPTER 10 4/23/2017 Chapter 10 Key Terms marketing research product services intangible inseparable perishable heterogeneous ITB

CREATE AND IMPROVE PRODUCTS CHAPTER 10 4/23/2017 Chapter 10 CREATE AND IMPROVE PRODUCTS Totally new products Major improvements in existing products Minor improvements in existing products ITB

PLAN MARKETING RESEARCH CHAPTER 10 4/23/2017 Chapter 10 PLAN MARKETING RESEARCH Steps in marketing research 1. Define the marketing problem. 2. Study the situation. 3. Develop a data collection procedure. 4. Gather and analyze information. 5. Propose a solution. ITB

TYPES OF RESEARCH STUDIES CHAPTER 10 4/23/2017 Chapter 10 TYPES OF RESEARCH STUDIES Secondary Research- Analyzing existing information gathered for another purpose and using it to solve a current problem Primary Research- Studies carried out to gather new information specifically directed at a current problem (continued on following slide) ITB

TYPES OF RESEARCH STUDIES (Primary Research) CHAPTER 10 4/23/2017 Chapter 10 TYPES OF RESEARCH STUDIES (Primary Research) Surveys Focus groups Observations Experiments ITB

Check out these examples… CHAPTER 10 4/23/2017 Chapter 10 Check out these examples… http://www.fastcompany.com/magazine/05/elab.html http://www.youtube.com/watch?v=oBaiKsYUdvg http://online.wsj.com/article/SB121927508211958397.html ITB

Checkpoint >> List the steps in a marketing research study. CHAPTER 10 4/23/2017 Chapter 10 Checkpoint >> List the steps in a marketing research study. Answer The steps in marketing research are to define the marketing problem, study the situation, develop a data collection procedure, gather and analyze information, and propose a solution. ITB

PRODUCT PLANNING Parts of a product Basic Product CHAPTER 10 4/23/2017 Chapter 10 PRODUCT PLANNING Parts of a product Basic Product Product Features (Options) Brand Name Packaging Guarantee or Warranty ITB

PRODUCT PLANNING Product planning procedures Idea development CHAPTER 10 4/23/2017 Chapter 10 PRODUCT PLANNING Product planning procedures Idea development Idea screening Strategy development Production and financial planning Limited production and test marketing Full-scale production ITB

Checkpoint >> What are the components of a product? Answer CHAPTER 10 4/23/2017 Chapter 10 Checkpoint >> What are the components of a product? Answer Products are everything businesses offer to customers and are composed of the basic product, product features, its brand name and packaging, and sometimes a guarantee or warranty. ITB

SERVICES Intangible Inseparable Perishable Heterogeneous CHAPTER 10 4/23/2017 Chapter 10 SERVICES Intangible No tangible form Inseparable Consumed at the time they are produced Perishable Cannot be stored for later use Heterogeneous Differences in the type and quality of services provided ITB

Checkpoint >> In what ways are services different from products? CHAPTER 10 4/23/2017 Chapter 10 Checkpoint >> In what ways are services different from products? Answer Products are tangible and may be nonperishable; it is generally easier to control the quality and marketability of these items. Services, however, are intangible, more difficult to market, and perishable. ITB

Price and Distribute Products CHAPTER 10 4/23/2017 10-3 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. ITB

Key Terms price distribution channel of distribution channel members CHAPTER 10 4/23/2017 Chapter 10 Key Terms price distribution channel of distribution channel members ITB

VALUE AND PRICE Buyers usually want to pay the lowest price possible. CHAPTER 10 4/23/2017 Chapter 10 VALUE AND PRICE Buyers usually want to pay the lowest price possible. Sellers want to charge the highest price possible. ITB

PRICING FACTORS Supply and demand Uniqueness Age Season Complexity CHAPTER 10 4/23/2017 Chapter 10 PRICING FACTORS Supply and demand Uniqueness Age Season Complexity Convenience ITB

PRICE A PRODUCT Selling price Product costs Operating expenses Profit CHAPTER 10 4/23/2017 Chapter 10 PRICE A PRODUCT Selling price Product costs Operating expenses Profit Gross margin Gross Margin = Selling price + Product costs Selling price = Product costs + Operating expenses Profit ITB

CHAPTER 10 4/23/2017 Chapter 10 PRICE A PRODUCT Markup Markdown ITB

CHAPTER 10 4/23/2017 Chapter 10 Checkpoint >> What is the formula for calculating the selling price of a product? Answer Selling price = Product cost + Operating expenses + Profit. ITB

CHANNELS OF DISTRIBUTION CHAPTER 10 4/23/2017 Chapter 10 CHANNELS OF DISTRIBUTION Need for distribution channels Differences in quantity Differences in assortment Differences in location Differences in timing Channels and channel members ITB

CHAPTER 10 4/23/2017 Chapter 10 Checkpoint >> What is the difference between a direct and an indirect channel of distribution? Answer In a direct channel of distribution, products move directly from the producer to the consumer. In an indirect channel, others may participate in the movement of products from the producer to the consumer, such as transportation services and retailers. ITB

Reinforcements Page 242 (1-3 and 4 or 5) Page 247 Ethics (1-3) Chapter 10 Reinforcements Page 242 (1-3 and 4 or 5) Page 247 Ethics (1-3) Page 248 (1-3) Page 254 (1-2 and 3 or 4)

CHAPTER 10 4/23/2017 10-4 Plan Promotion Goals Justify the importance of communication in marketing. Identify and describe the common types of promotion. ITB

CHAPTER 10 4/23/2017 Key Terms Chapter 10 Promotion ~ any form of communication use to inform, persuade, or remind. Effective communication ~ exchange of information so there is common understanding by all participants. Personal selling ~ direct, individualized communication withy prospective customers to assess their needs and assist them in satisfying those needs with appropriate products and services. Advertising ~ any paid form of communication through mass media directed at identified consumers to provide information and influence their actions. ITB

COMMUNICATION The communication process CHAPTER 10 4/23/2017 Chapter 10 COMMUNICATION The communication process Communicating through promotion – p.256 How does identifying a target market improve promotion communications? ITB

Components of Effective Communication CHAPTER 10 4/23/2017 Chapter 10 Components of Effective Communication ITB

CHAPTER 10 4/23/2017 Chapter 10 Checkpoint >> How does identifying a target market improve promotion communications? Answer Communication can be developed and directed more specifically if a target market is identified. ITB

A QUESTION OF ETHICS on page 258 Chapter 10 A QUESTION OF ETHICS on page 258 The Price of Success A MICROSOFT CASE STUDY http://www.nytimes.com/2007/09/17/technology/17cnd-soft.html?ex=1347681600&en=d16802a6603d512f&ei=5088&partner=rssnyt&emc=rss http://www.computerworld.com/s/article/9103578/For_Bill_Gates_antitrust_fight_was_a_personal_crucible http://en.wikipedia.org/wiki/Bill_Gates

PROMOTION Personalized promotion Mass promotion CHAPTER 10 4/23/2017 Chapter 10 PROMOTION Personalized promotion Direct communication w/ customer Tailors information for that customer a.k.a. Personal Selling Mass promotion Communicates with many people at the same time Common message More info on next slide ITB

PROMOTION Mass Promotion (continued) Chapter 10 PROMOTION Mass Promotion (continued) Advertising~ pd communication through mass media to influence the public Publicity~ non-paid promotion Public Relations~ ongoing program of pd and non-pd communications. Planned to favorably influence public opinion Sales Promotions ~activities and materials designed to reinforce a company’s brand or image

PROMOTION Mass personalization Chapter 10 PROMOTION Mass personalization Combines the advantages of personal selling and mass promotion Begins as mass promotion and then invites prospective customers to call, write, or go online, for a more personal analysis of their needs.

CHAPTER 10 4/23/2017 Chapter 10 Checkpoint >> Describe the advantages and disadvantages of the major types of promotion. Answer Personalized promotion allows the provider to meet customers and identify customer needs. It is, however, the most expensive type of promotion. Mass promotion reaches a larger target market and is much less expensive. It does not, however, provide for individualized service, and sales (results) are often not immediate. ITB

Reinforcement 10-4 Page 260 Page 259 (1, 2, and 4) AND Chapter Review 1-21 and 2 from 22-27