© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 10 SLIDE Marketing Basics Develop Effective Products and Services Price and Distribute Products Plan Promotion 10 C H A P T E R Marketing

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 10 SLIDE 2 UNDERSTAND MARKETING ●Marketing activities ●Marketing businesses ●Marketing functions

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 10 SLIDE 3 Marketing Functions

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 10 SLIDE 4 Checkpoint ●Define marketing and the seven marketing functions. ●Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. ●The seven marketing functions include product and service management, distribution, selling, marketing information management, financial analysis, pricing, and promotion.

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 10 SLIDE 5 MARKETING STRATEGY ●Marketing planning ●Develop a successful marketing strategy ●Identify a target market ●Create a marketing mix ●four P’s

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 10 SLIDE 6 UNDERSTAND CUSTOMERS ●Consumer decision-making ●Buying motives

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 10 SLIDE 7 STEPS IN THE CONSUMER DECISION-MAKING PROCESS 1. 1.Recognize a need Gather information Select and evaluate alternatives Make a purchase decision Determine the effectiveness of the decision.

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 10 SLIDE 8 CREATE AND IMPROVE PRODUCTS ●Totally new products ●Major improvements in existing products ●Minor improvements in existing products ●Marketing Research

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 10 SLIDE 9 PLAN 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.

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 10 SLIDE 10 TYPES OF RESEARCH STUDIES ●Surveys ●Focus groups ●Observations ●Experiments

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 10 SLIDE 11 PRODUCT PLANNING ●Parts of a product ●Product planning procedures ●Idea development ●Idea screening ●Strategy development ●Production and financial planning ●Limited production and test marketing ●Full-scale production

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 10 SLIDE 12 VALUE AND PRICE ●Buyers usually want to pay the lowest price possible. ●Sellers want to charge the highest price possible.

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 10 SLIDE 13 PRICING FACTORS ●Supply and demand ●Uniqueness ●Age ●Season ●Complexity ●Convenience

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 10 SLIDE 14 PRICE A PRODUCT ●Selling price ●Product costs ●Operating expenses ●Profit Selling price = Product costs + Operating expenses +Profit

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 10 SLIDE 15 GROSS MARGIN Gross Margin = Selling price + Product costs

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 10 SLIDE 16 MARKUP ●The amount added to the cost of a product to set the selling price ●Markup on cost ●Markup on selling price

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 10 SLIDE 17 MARKDOWN ●A reduction from the original selling price ●Reasons for markdowns ●Low demand ●End of season ●Flaws

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 10 SLIDE 18 CHANNELS OF DISTRIBUTION ●Need for distribution channels ●Differences in quantity ●Differences in assortment ●Differences in location ●Differences in timing ●Channels and channel members ●Wholesalers & Retailers

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 10 SLIDE 19 COMMUNICATION AND PROMOTION ●The communication process ●Communicating through promotion

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 10 SLIDE 20 COMPONENTS OF EFFECTIVE COMMUNICATION

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 10 SLIDE 21 TYPES OF PROMOTION ●Personalized promotion ●Mass promotion ●Merchandising ●Mass personalization ●Print ●Broadcast ●Cyber