BUSINESS SEMESTER 2 MISS NATALIE Marketing

Why study marketing? Businesses use marketing to increase their effectiveness and the profits they make. Every business today is involved to some degree in marketing (from real estate agencies, travel agencies, retail stores, hospitals, schools, law offices, and even governments. You will improve your personal marketing skills, which can help you as you apply to universities or jobs. Understanding marketing will make you a smarter consumer.

Where does marketing take place? Businesses directly involved in marketing Advertising agencies Marketing research firms Sales representatives Trucking companies Credit card companies Telemarketing businesses Travel agencies Businesses with major marketing activities Retailers manufacturers Banks Real estate agencies Insurance companies Automobile dealers Farmers and ranchers Businesses with limited marketing role Law offices Physicians/doctors Accounting firms Government agencies Universities Construction businesses Public utilities companies

Your definition Please take a minute and write your own definition of marketing.

Marketing and the Marketing Concept Marketing: the creation and maintenance of satisfying exchange relationships. Marketing Concept: using the needs of customers as the primary focus during the planning, production, distribution, and promotion of a product or a service

The 7 functions of Marketing Marketing activities can be grouped into 7 functions: 1. Product/Service Management 2. Distribution 3. Selling 4. Marketing information management 5. Financing 6. Pricing 7. Promotion

1. Product/Service Management Assisting in the design and development of products and services that will meet the needs of prospective customers. Example: Apple developed the ipod mini to have touch screen capabilities and high storage capacities to satisfy needs of customers

2. 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: Coca Cola must distribute its product to many different retailers so it can be purchased by consumers.

3. Selling Direct, personal communications with prospective customers in order to assess the needs and satisfy those needs with appropriate products and services. Example: A salesperson helps you find different sizes of clothing until you find the item that fits perfectly, and you buy it!

4. Marketing-Information Management Obtaining, managing, and using market information to improve decision making and the performance of marketing activities. Example: Your friend is starting a business tutoring elementary kids. Before they start operating, they give surveys to elementary students and parents about their interest in tutoring, and which subjects most often are in highest demand for tutoring.

5. Financing Budgeting for marketing activities, obtaining the necessary financing, and providing financial assistance to customers to assist them with purchasing the organization’s products and services. Example: You are reopening your café after renovations, and celebrating by hosting a party with live music. Your finance officer must decide how much money from the budget you can spend on billboards and posters to have around town to advertise this event.

6. Pricing Establishing and communicating the value of products and services to prospective customers. Example: You own a new restaurant and the items on your menu are quite expensive. Prospective customers are hesitant to come to your restaurant because they do not want to pay for a meal they are not guaranteed to be satisfied with. You must decide whether or not to lower your prices to attract more customers.

7. Promotion Communicating information to prospective customers through advertising and other promotional methods to encourage them to purchase the organization’s products and services. Example: During popular sporting events broadcast on TV like the Olympics or the American Football Superbowl, companies will often spend ridiculous amounts of money to buy a spot to play their commercial to advertise their product.

Frito Lay’s Other Promotional Methods For the Superbowl, Frito Lay held a competition for people to create 30 second commercials for their popular product, Doritos. Once the commercials were submitted, people voted for the best ones, and the top three were chose to be aired during the Superbowl last weekend and won monetary prizes. Frito Lay got their customers to do their advertising for them!

QUICK CHECK! Answer the following questions in your notebook! 1. Name 3 types of marketing activities that you see in your everyday life. 2. What is the key attribute of the exchange relationships that marketers seek to create and maintain?

Keep in mind: Marketing cannot be successful if the product is not what the consumer wants or is a poor quality product. The consumer might be encouraged to buy a product through advertising, selling, or a low price, but the product MUST be seen as satisfying the needs of the customer!

Market Development Self Sufficiency Bartering Specialization of Labor Other Marketing Activities Central Markets Money Systems

Self Sufficiency Being self sufficient means you do not have to rely on others for the things you need to survive. -Like early hunting and gathering societies -This type of lifestyle is extremely hard work and very risky. People who were not successful at being self sufficient tried to find other ways to survive- like bartering!

Bartering Bartering- exchanging products or services with others by agreeing on their values -A system of bartering was created so people could exchange the things they needed to survive. -Exchanging products through marketing was one of the first examples of marketing. *Do people still barter today? *Think of a situation in which you bartered with someone for something!

Specialization of Labor Specialization of Labor happens when someone concentrates on one or a few related activities so that they can be done well. -Specialization of labor made it possible for people to produce larger quantities of a single product. -Therefore, more of that product would be available to exchange with other people.

Example of Specialization Example: Mr. Robinson is a terrible hunter, but is great at making flower arrangements. If he only makes flower arrangements, he can trade flower arrangements for food and survive.

Money Systems A money system is the established use of currency as a recognized medium of exchange. - As specialization of labor became more and more common, and a greater variety of goods became available, it was not always possible to barter. - Not all people needed the products the others had to offer, or could reach an agreement on how much each good was worth so they could be exchanged evenly….so a money system was developed. - This development is another example of marketing!

Central Markets Central Market- a location where people bring products to be conveniently exchanged. -With many people exchanging goods and using a money system, the demand for products increased. -A lot of time was spent gather the products and traveling to sell and purchase products, so central markets were developed- often near where rivers or roads met. Towns and cities developed in those locations and became the center of trade!

Central Markets In your notebook: List all the locations or areas that you can think of that you would consider central markets.

Central Markets

Other Marketing Activities As central markets expanded, other types of business services were created to make these exchanges easier. Examples: -Businesses to purchase products from producers and then sell them to consumers. -Loaning money to both consumers and producers. -Transportation of goods These other marketing activities made the exchange process more effective!

The Functions of a Business REMEMBER: Marketing is an important part of running a business, but it cannot make a business successful on its own. The following activities are other essential functions of a successful business: Production, Operations, Accounting and Finance, Management and Administration, Marketing, Coordination of Business Functions.

FUNCTIONS OF BUSINESS CHALLENGE For each function of business I want you to draw a symbol that represents or embodies that function. Put this drawing in your notes next to each function. We will share these and see who comes up with the best symbols for each function.

Business Function 1: Production The primary reason for a business to exist is to provide products or services to consumers to earn a profit. The Production Function creates or obtains products or services for sale. Production can take various forms: -Raw materials -Processing -Services Merchandising is another part of Production- even though it is offering products already produced or manufactured by others for sale to consumers.

Business Function 2: Operations Operations: the ongoing activities designed to support the primary function of a business and keep it running efficiently. Examples of operations activities: -operating and maintaining the building and equipment -products must be obtained, transported, and stored -paperwork must be completed -customer questions must be answered -THINK OF 2 OTHER OPERATIONS ACTIVITIES!

Business Function 3: Accounting and Finance Accounting and Finance: plans and manages financial resources and maintains records and information related to the business’ finances. -Finance begins by determining the amount of capital needed for the business and where that capital will be obtained. -Next, budgets must be developed, monitored, and updated. -Most businesses must borrow money for major purchases, so determining sources for borrowing, interest rates, and loan payback schedules are other important responsibilities.

Business Function 4: Management and Administration Management and Administration: develops, implements, and evaluates the plans and activities of a business. Someone must determine what the business will do, how it can best meet the needs of consumers, and how it will respond to competitors’ actions. Problem solving, managing employees, and evaluating the activities of the business are all ongoing responsibilities of managers. Managers are held responsible for the performance of a company- including whether or not it is profitable.

Business Function 5: Marketing Marketing: the creation and maintenance of satisfying exchange relationships. Marketing includes all the activities that are done to make products and services available and ensure satisfying exchanges with consumers are created and maintained.

Coordinating the Business Functions Each of the functions of business is dependent on the other functions if the business is going to be effective and successful! Think of a situation where some of the functions of business might not coordinate, and what negative consequences might happen as a result!