Chapter 1: Marketing Today and Tomorrow Marketing & Management Mrs. Piotrowski 1

WHAT IS MARKETING? SECTION 1: 2

Marketing Misconception Many people only think of advertising and selling when they think of marketing. Let’s prove them wrong… 3

Definition of Marketing Marketing is the creation and maintenance of satisfying exchange relationships. Huh? 4

A large consumer products company may introduce as many as 100 new products a year. On average, only 5% are successful. Why do you think this is? 5

Marketing is Everywhere You see marketing every day… –Advertisements –Product transports –Market researchers You are involved in marketing when you… –Make a purchase –Decide whether to pay with cash or credit –Pay to have an item shipped to your house 6

Understanding marketing concepts will help you… Make better purchasing decisions. Develop your leadership skills. Learn skills needed for many high- paying careers. 7

8 Make a list of business activities you feel are examples of marketing. What jobs and careers could be related to these activities? 8

All Businesses Use Marketing Businesses directly involved in marketing: Advertising agencies Marketing research firms Telemarketers Businesses directly involved in marketing: Advertising agencies Marketing research firms Telemarketers 9 Businesses with major marketing activities: Retailers Banks Real estate agencies Insurance agencies Automobile dealers Businesses with major marketing activities: Retailers Banks Real estate agencies Insurance agencies Automobile dealers Businesses with limited marketing roles: Law offices Medical centers Government agencies Public utilities Businesses with limited marketing roles: Law offices Medical centers Government agencies Public utilities

10 To prepare for careers in marketing, you need a broad understanding of marketing functions and activities. There are 7 areas that have been identified as essential skills needed by marketers. To prepare for careers in marketing, you need a broad understanding of marketing functions and activities. There are 7 areas that have been identified as essential skills needed by marketers.

Marketing Functions Market Planning Identifying and understanding the markets a company wants to serve and developing effective marketing strategies for each market. EXAMPLE: Pepsi targets many different markets and diversifies their advertising to attract each market. 11

Marketing Functions Product & Service Management Assisting in the design and development of products and services to meet the needs of prospective customers. EXAMPLE: Apple combined the technologies of an iPod, cell phone, and Internet browser to produce the iPhone. 12

Marketing Functions Distribution Determining the best methods and procedures to be used so prospective customers are able to locate, obtain, and use the products and services of an organization. EXAMPLE: Car rental companies pre-arrange rental agreements so everything is ready to go when the customer arrives. 13

Marketing Functions Pricing Establishing and communicating the value of products and services to prospective customers. EXAMPLE: A home construction company offers customized decorating and furnishings included with a new build. 14

Marketing Functions Promotion Communicating information to prospective customers through advertising and other promotional methods to encourage them to purchase the organization’s products and services. EXAMPLE: Colleges mail brochures to prospective students. 15

Marketing Functions Selling Direct, personal communications with prospective customers in order to assess needs and satisfy those needs with appropriate products and services. EXAMPLE: Foot Locker posts a picture of Nike’s newest sneaker on its Facebook page and asks what customers think. 16

Marketing Functions Marketing-Information Management Obtaining, managing, and using market information to improve decision making and the performance of marketing objectives. EXAMPLE: Use of electronic scanners at supermarket checkouts. 17

Marketing Functions Financing Budgeting for necessary financing, and providing financial assistance to customers to assist them with purchasing products and services. EXAMPLE: Car manufacturers have their own financing organizations to provide loans to their customers. 18

Marketing Functions Risk Management Providing security for products, personnel, and customers and reducing the risk associated with marketing decisions and activities. EXAMPLE: A credit card company seeking to shift their marketing message to small business owners' business needs. 19

BUSINESS NEEDS MARKETING SECTION 2: 20

Make a list of products you have purchased that you later found out were not what you expected. Why did you make the purchase? What did you do when you became dissatisfied? How do you think businesses could do a better job of satisfying customers in situations like yours? 21 SOLVE.

Why does business need marketing? To help them sell their product to more customers by: –Informing customers about their product’s existence –Informing customers where to buy their product –Determining customers’ needs and wants 22

The Functions of Business 23

The Functions of Business How can the lack of coordination among the business functions affect a company? 24

UNDERSTANDING THE MARKETING CONCEPT SECTION 3: 25

26 You are on the new product development team in the marketing department of a company. How will you identify what products your customers want to own? Once you know what the customer wants, how will you introduce the product to them? 26

27 In 1908, it cost $280 to purchase one of the few available models of automobiles, the Model T Ford. It was a luxury few people could afford. In today’s dollars, the same car would cost about $14,000, a pretty affordable price. Would people buy it today?

Elements of the Marketing Concept 28 Operate a business profitably Develop and market products or services Identify needs of customers The marketing concept is using the needs of customers as the primary focus during the planning, production, pricing, distribution, and promotion of a product or service.

Identify the Market The first step in implementing the marketing concept is to identify the market(s) the company wants to serve. –A market is a description of a unique group of prospective customers a business wants to serve, along with their location. 29

Develop a Marketing Mix The second step is to develop a marketing mix that will meet the needs of the market and that the business can provide profitably. The marketing mix is the blending of four marketing elements: –Product –Distribution (Place) –Price –Promotion 30

Elements of the Marketing Mix PRODUCT – anything offered to a market by the business to satisfy needs, including physical products, services, and ideas. DISTRIBUTION (PLACE) – includes the location and methods used to make the product available to customers. 31

Elements of the Marketing Mix PRICE – the amount that customers pay and the methods of increasing the value of the product to the customers. PROMOTION – the methods used and information communicated to encourage customers to purchase and to increase their satisfaction. 32

33 The Marketing Mix

THE CHANGING ROLE OF MARKETING SECTION 4: 34

35 Make a list of 3 non-business organizations. How can using marketing benefit these organizations? Identify 1 specific way that marketing functions can be used by each organization. 35 SOLVE.

36 Production Era Emphasis on producing and distributing new products 1900s–1920s Sales Era Emphasis on using advertising and salespeople to convince customers to buy a company’s products 1930s–1940s Marketing Department Era Emphasis on developing many new marketing activities to sell products 1950s–1960s Marketing Concept Era Emphasis on satisfying customers’ needs with a carefully developed marketing mix 1970s–Today Changing Approach to Marketing

37 Make a list of companies or businesses you have made multiple purchases from. Why do you keep returning to these companies to make purchases? 37

Improving the Marketing Concept Relationship Marketing focuses on developing loyal customers who continue to purchase from the business for a long period of time. Why do this? –Customers prefer to buy from a business they know and trust. –It costs businesses a great deal of money to identify new customers. 38

Improving the Marketing Concept Employee Empowerment is an approach to customer service that gives employees the authority to solve many customer problems. Why do this? –Businesses are represented by their employees. If employees cannot help them, customers will quickly become dissatisfied and look for another place to shop. 39