CHAPTER OBJECTIVES NATURE AND SCOPE OF MARKETING nDiscuss the importance of marketing and its role in the economy. nList the activities that are a part of marketing. nDefine basic marketing concepts and the four elements of the marketing mix. nExplain the four stages of the product life cycle. nID the consumer goods classifications. 2121

Marketing nNot always easy to match production and consumption. nProducers/consumers need info. to help them make their decisions nMarketing - set of activities that get products from producers to consumers - but much more than just transporting

Marketing nIncludes packaging, developing brand names, determining prices, financing and storing products and promotion and many morepackaging nPackaging Engineer nASUASU nSalarySalary nConsumers comes into daily contact with marketing in one form or another

nBetter description by the American Marketing Association nProcess of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives. nKey tool of marketing is to match supply and demand nGoal of marketing is to create and maintain a satisfying exchange relationship between buyers and sellers

nOrganizations engaged in marketing nRetailers - businesses that sell directly to final consumers nBusinesses that sell services rather than products are also included nWholesalers - businesses that buy products from businesses and sell them to other businesses nOver 1/3 of all people employed in the US work in a marketing job or a marketing business

NATURE OF MARKETING nMarketing Activities - pg 547 nThese activities must occur before a product can be advertised and sold nBuying nSelling nTransporting nStoring nFinancing nResearching nRisk taking nGrading and valuing

NATURE OF MARKETING nCost of Marketing nRole of Marketing nProduction oriented nSales oriented nCustomer oriented nA Co. that has adopted the marketing concept will have a marketing manager who is part of top management and is involved in all major decisions--work closely with other people in co. and they strive for customer satisfaction

NATURE OF MARKETING nMarket Determination--must determine the market it wants to serve nMarket=types of buyers a bus. wishes to attract and where those buyers are located nWhom to serve - demographics nWhere to serve - geographic nIdentifying target markets - groups of customers w/ similar needs; do market research to ID market before products are even developed

Elements of Marketing – 4 Ps nProduct - pg 552 nPrice - pg 553--not the easiest to determine nDistribution (Place) - pg 554 nPromotion - pg 555 nAdvertising nPersonal selling nMarketing Mix - blend of all decisions related to product, price, place, promotion

MARKETING PLAN Marketing Plan — detailed written description of all marketing activities that a business must accomplish and coordinate in order to sell its products Describes goals, target markets, marketing mixes and identifies the ways in which the business will evaluate if the activities were successful and if the goals were accomplished Written for a one year period

PRODUCT LIFE CYCLE Four stages of sales and profit performance through which ALL brands of a product progress: nIntroduction nBrand new product enters the market; no competition; low profits at this time due to high costs or production and marketing a new product; counting on future sales nGrowth nWhen several brands of a new product are available, life cycle changes to growth stage; each company tries to attract customers to it specific brand; usually make a profit at this stage

PRODUCT LIFE CYCLE nMaturity nProduct has been purchased by large numbers; quite profitable; many competing brands; loyalty develops at this stage; promotion of brand name, packaging, image, promotion and price are often emphasized at this stage; profits begin to fall at the end of the maturity stage; reintroduce old products nDecline nOccurs when a new product is introduced that is much better or easier to use; customers begin to switch; may find new uses for old products

Sales Profits $ IntroductionGrowthMaturityDecline PRODUCT LIFE CYCLE

CONSUMER PRODUCTS nIndustrial goods nProducts designed to be used by another business or incorporated into products: aluminum, bricks, steel; bought in large quantities nConsumer goods nProducts designed for personal or home use; bought in small quanitites nConvenience goods nShopping goods nSpecialty goods nUnsought goods

Consumer Goods nConvenience goods nInexpensive items; bought w/o much thought: groceries nShopping goods nPurchased less frequently than convenience goods, higher price, require some buying thought; comparable shopping nSpecialty goods nProducts customers insist on having and are willing to search for them

Consumer Goods nUnsought goods nCustomers do not shop for these; no strong desire to have them; present a difficult marketing problem.

Consumer Goods nUnsought goods Ex: life insurance, encyclopedias, funeral services Usually have to go to the customer and use personal selling to discuss the need for the product

Successful marketing strategies nCannot afford to guess nToo expensive and consumers have too many choices for businesses to risk making mistakes nMarketers use concepts such as the product life cycle and consumer goods categories to plan effective marketing mixes. nProduct in the growth stage will have a mix different than if it is in the maturity stage

Chapter concepts-pg 562 n Marketing helps to balance the supply of products produced with the demand for those products. The goal of effective marketing is to create and maintain satisfying exchange between buyers and sellers. n Every business is involved in marketing. Marketing is the primary activity for retailers and wholesalers. More than one third of all people employed in the U.S. complete marketing activities or work for a marketing business.

n Marketing is more than advertising and selling. It involves eight activities: buying, selling, transporting, storing, financing, researching, risk taking, and grading and valuing. nDuring the 1900s, marketing approaches evolved from production-oriented to sales- oriented and finally to customer-oriented. Companies that operate according to the marketing concept keep the needs of consumers uppermost in mind during the design, production, and distribution of a product

n Businesses must decide whom to serve and where to serve when planning marketing. They use marketing research to identify target markets- customers with very similar needs that the business wants to serve. n Marketing managers make decisions about the four elements of marketing: the product, its price, distribution, and promotion. Together, these decisions form the marketing mix.

n Companies prepare a written marketing plan to coordinate the many designs and activities involved in marketing. The top marketing executive usually prepares the marketing plan with information gathered from many other people. n The product life cycle consists of four stages of sales and profit performance that products move through during their time on the market. The stages are introduction, growth, maturity, and decline.

n Products are classified as either industrial or consumer goods, based on who purchases them and how they will use the products. Consumer good can be classified into four categories based on their importance to consumers and how much time consumers and willing to spend making the buying decisions. The categories are convenience, shopping, specialty, and unsought goods.

nReview Questions - Pg 563 n6, 7, 9, 12, 13 nDiscussion - Pg 564 n6-10 nCase 21-1 and Pg 565