MARKETING 1 Chapter 4 THE BASICS OF MARKETING 4-1Changes in Today’s Marketing 4-2Planning a Marketing Strategy 4-3Deciphering Consumers and Competitors 4-4The Varied Role of Marketing CHAPTER 4

MARKETING Chapter 4 2 Focus Questions: What do you think is meant by the ad’s headline? ©VISA

MARKETING Chapter 4 3 Focus Questions: What do you think is meant by the ad’s headline? What role does Visa play in helping businesses market products and services to customers? ©VISA

MARKETING Chapter 4 4 Focus Questions: What do you think is meant by the ad’s headline? What role does Visa play in helping businesses market products and services to customers? How do credit and financial services such as the ones described in this ad make it easier for businesses to participate in international commerce? ©VISA

MARKETING Chapter 4 5 CHANGES IN TODAY’S MARKETING GOALS Explain how marketing today differs from marketing in the past. Show why understanding customers is crucial to applying the marketing concept. 4-1

MARKETING 6 Chapter 4 THE BASICS OF MARKETING Newsline page 88 Marketing Matters page 90 CHAPTER 4

MARKETING Chapter 4 7 Marketing Has Changed Marketing Experiences Understanding the Differences From few to many From independence to integration From problems to opportunities From expense to investment

MARKETING Chapter 4 8 Marketing Has Changed Marketing Experiences Define Marketing

MARKETING Chapter 4 9 Marketing Has Changed Understanding the Differences From few to many From independence to integration From problems to opportunities From expense to investment

MARKETING Chapter 4 10 Marketing Has Changed Understanding the Differences From few to many Marketing has expanded in scope Began to move product from the producer to consumer (distribution) Then evolved into promotion and sales Now, all 9 functions are used

MARKETING Chapter 4 11 Marketing Has Changed Understanding the Differences From independence to integration Marketers worked alone (Mr. Incredible) Planning for marketing was done after other business planning was completed…after thought Now, it is integrated- meaning it is an essential part of the business It is involved in all important business decisions, and strategies are developed as a part of the business plan

MARKETING Chapter 4 12 Marketing Has Changed Understanding the Differences From problems to opportunities Marketing used to be handled as a problem- solving tool, now it is a creation tool Also, it is often called on when companies face problems….inventory, competitors Today’s businesses can’t afford to wait until problems occur, so they are continuously looking for market opportunities

MARKETING Chapter 4 13 Marketing Has Changed Understanding the Differences From problems to opportunities Marketing Opportunities Ways to improve a companies offerings in current markets It is responsible for identifying and planning opportunities

MARKETING Chapter 4 14 Marketing Has Changed Understanding the Differences From expense to investment Old days Marketing was viewed as an EXPENSE and was the first place to cut Today it is a critical investment because it is responsible for matching a company’s offerings with market needs.

MARKETING Chapter 4 15 What Does Marketing Marketing Mean to a Business? Reliable Auto Service Dee’s Designs

MARKETING Chapter 4 16 Activity 1 Pinpointing Promotion page 92

MARKETING Chapter 4 17 Activity 2 Choose one U.S. Company that has been in existence for at least 20 years such as McDonalds. Locate old ads from the company and compare those ads with marketing ads the company uses today. Create a presentation comparing the old vs the new.

MARKETING Chapter 4 18 PLANNING A MARKETING STRATEGY GOALS Understand how the marketing concept transforms business planning. Explain the importance of market seg- ments and market opportunity analysis. Discuss how businesses develop the right marketing mix. 4-2

MARKETING Chapter 4 19 Putting Marketing Up Front Successful businesses use carefully prepared plans to guide their operations Planning that identifies how a company expects to achieve its goals is known as a strategy. A business’s strategy provides the clearest indication of whether that business understands the marketing concept.

MARKETING Chapter 4 20 Putting Marketing Up Front How Does the Marketing Concept Affect Planning? Without the Marketing ConceptWith the Marketing Concept Develop a Product Conduct research to identify potential customers and their needs Decide on marketing activities Develop a marketing mix (4Ps) that meets specific customer needs. Identify potential customers

MARKETING Chapter 4 21 Putting Marketing Up Front By incorporating the marketing concept companies attempt to develop products and services that respond to customers’ needs rather than what the company thinks should be offered. Marketing will be directed at meeting the identified needs of the customers rather than developing ways to persuade people to buy something they may not need.

MARKETING Chapter 4 22 How Does the Marketing Concept Affect Planning? Without the marketing concept 1. Develop a product. 2. Decide on marketing activities. 3. Identify potential customers. With the marketing concept 1. Conduct research to identify potential customers and their needs. 2. Develop a marketing mix (product, distribution, price, promotion) that meets specific customer needs.

MARKETING Chapter 4 23 Understanding the Customer Customers have many choices of products They often spend time comparing products and services before making decisions Bringing a new product to the market is expensive, it take time and money to develop, produce, distribute, and promote When it enters the market it must compete with other companies This competition among products is very intense

MARKETING Chapter 4 24 Understanding the Customer Identifying customer needs Successful companies are usually those that meet customer needs But, meeting customer needs is not easy Many customers are not sure of their needs, or have conflicting needs Customers have many needs, they typically have limited amounts of money available Needs of individuals and groups can be different

MARKETING Chapter 4 25 Two Views of Consumers Customers are all alike and can be influenced to buy what a business offers. Customers are quite different and they select products and services to meet their unique needs.

MARKETING Chapter 4 26 Understanding the Customer Businesses tend to deal with customers in two ways 1.Some businesses don’t view the specific needs of customers as important. Business feel most consumers are similar in terms of their needs and purchase behavior They believe either consumers don’t understand their own needs or business can influence consumer needs with well-designed products, pricing and promotion.

MARKETING Chapter 4 27 Understanding the Customer Businesses tend to deal with customers in two ways 2. Understanding customers is an important part of business activities Study needs and try to understand how consumers evaluate products and services to make decisions about what to purchase They feel they can better satisfy consumers if they can develop products and services that respond to what the consumer wants and expects

MARKETING Chapter 4 28 Understanding the Customer Satisfying customer needs Businesses study markets to identify groups of consumers with unsatisfied needs Through extensive marketing research, the business gather and analyzes consumer information It categorizes customers according to similar characteristics, needs, and purchasing behavior Groups of similar markets are known as market segments

MARKETING Chapter 4 29 Understanding the Customer Satisfying customer needs After distinct market segments have been identified, a business will analyze each of them It tries to determine which market segments can be served most effectively and which have the strongest needs, the most resources, and the least competition Studying and prioritizing market segments to locate the best potential based on demand and competition is know as market opportunity analysis

MARKETING Chapter 4 30 Understanding the Customer Satisfying customer needs Once segments have been identified and prioritized, the business selects those segments on which it will focus its efforts The segments selected become the business’s target market Target Market is clearly defined segment of the market to which a business want to appeal

MARKETING Chapter 4 31 Planning the Offering The marketing mix Creating the right mix Developing products Making distribution decisions Pricing products and services Planning promotion

MARKETING Chapter 4 32 Combining Parts of the Marketing Mix Product that offers choices Distribution that provides convenience Price that gives value Promotion that aids decision-making Satisfied customers

MARKETING Chapter 4 33 UNDERSTANDING CONSUMERS AND COMPETITORS GOALS Detail the stages of consumer decision making. Understand how business can use the marketing concept in various types of competition. 4-3

MARKETING Chapter 4 34 Consumer Decision Making Consumers make decision every day Decision is a choice among alternatives Made to satisfy a need or to solve a problem Consumers want to choose the alternatives that provide us the most satisfaction or the greatest value

MARKETING Chapter 4 35 Consumer Decision Making If marketers want to satisfy customer needs, they must understand how consumers choose what they will buy Different theories are made, but there is a general agreement that people follow a series of decision making when purchasing These decisions become routine and simple when repeated

MARKETING Chapter 4 36 Consumer Decision-Making Stages Consumers make a series of decisions when deciding on a purchase. 1.Recognize a need 2.Identify alternatives 3.Evaluate choices 4.Make a decision 5.Assess satisfaction

MARKETING Chapter 4 37 Consumer Decision Making The stages of a decision 1.Recognize 2.Identify 3.Evaluate 4.Decide 5.Assess

MARKETING Chapter 4 38 The Stages of a Decision Recognize - Begins when a consumer recognizes that a need exists If the need is urgent the process is quick If not, then the consumer may take time before buying

MARKETING Chapter 4 39 The Stages of a Decision Identify - When the consumer becomes interested in finding a solution Identifying products or services that relate to the need

MARKETING Chapter 4 40 The Stages of a Decision Evaluate - When the consumer gathers information and uses it to evaluate choices An evaluation is done to see if any choice is better, more available, or more affordable

MARKETING Chapter 4 41 The Stages of a Decision Decide - When the consumer is comfortable with the evaluation, a decision is made Decision will be to select one of the available choices, to gather more information, or to do nothing

MARKETING Chapter 4 42 The Stages of a Decision Assess - When the consumer determines whether or not the choice was correct Evaluated to see if it satisfied the need If it did the decision will likely be repeated the next time

MARKETING Chapter 4 43 Relying on Information Marketers are creative. Creativity is needed to plan the marketing mix, develop new product features and uses, and prepare promotional materials and activities Conducting research is an important marketing activity Need to be skilled in organizing research and using results

MARKETING Chapter 4 44 Relying on Information Most important part of research is the study of potential and current customers Additionally, the research about competitors will identify the type of competition and strengths and weaknesses of competing companies

MARKETING Chapter 4 45 Responding to Competition Intense competition Limited competition Monopolistic competition

MARKETING Chapter 4 46 Responding to Competition Intense competition Most difficulty type of competition businesses face is market in which businesses compete with others offering very similar products Ex- Pure competition…many business offering the same product (Agricultural)

MARKETING Chapter 4 47 Responding to Competition Limited competition Some businesses have the advantage of having little or no direct competition Ex- Known as a monopoly

MARKETING Chapter 4 48 Responding to Competition Monopolistic competition Most business face competition somewhere between intense and monopoly They have many competitors, but customers see differences among choices The customers determine which product fits there wants and needs

MARKETING Chapter 4 49 THE VARIED ROLE MARKETING GOALS Explain how the role of marketing differs in various types of businesses. Identify ways marketing is used by non- business organizations. 4-4

MARKETING Chapter 4 50 The Varied Uses of Marketing Producers and manufacturers Channel members Service businesses

MARKETING Chapter 4 51 The Varied Uses of Marketing Producers and manufacturers They develop the products and services needed by other businesses and consumers Because of that role, the product part element of the marketing mix receives the most attention Distribution is also important to insure the product gets to the customers

MARKETING Chapter 4 52 The Varied Uses of Marketing Producers and manufacturers Unless manufacturers and producers distribute products directly to the users, they must rely on other businesses to make good decisions about product distribution, prices, and promotion Even if producers and manufacturers do not sell directly to final consumers, they still must understand and respond to customers needs EX- Nike shoes, sold by Nike, but also sold by stores like Finish Line, Champs, Sports Authority

MARKETING Chapter 4 53 The Varied Uses of Marketing Channel members A channel of distribution is made up of all the businesses involved in completing marketing activities as products move from the producer to the consumer Channel Members- are the businesses used to provide many of the marketing functions during the distribution process. If the product does not meet the customers needs, the customers are likely to hold the channel member as responsible as the producer

MARKETING Chapter 4 54 The Varied Uses of Marketing Channel members After decisions are made about what products to offer, channel members then focus their attention on the other mix elements Retailers are responsible for most final pricing decisions They use promotion activities to encourage consumers to purchase their products

MARKETING Channel of Distribution Each is a Channel Member WHOLESALER

MARKETING Chapter 4 56 The Varied Uses of Marketing Service businesses Most service businesses work directly with customers rather than through a channel of distribution Therefore they are responsible for the entire marketing mix Product mix element is very important- they must develop procedures to insure quality service every time

MARKETING Chapter 4 57 The Varied Uses of Marketing Service businesses Distribution is also important- because the service must be available where and when the customer wants it Service businesses have more control over pricing It is more difficult for customer to determine the appropriate price

MARKETING Chapter 4 58 Non-Business Organizations Primary focus is on something other than providing products and service for a profit It is not unusual today to see marketing used by museums, libraries, symphonies, athletic teams, churches, and clubs Examples Government agencies Churches Schools Museums Professional organizations

MARKETING Chapter 4 59 Marketing By Non-Business Organizations Government agencies Nonprofit organizations Supporting non-business organizations

MARKETING Chapter 4 60 Marketing By Non-Business Organizations Government agencies Most have the characteristics of a monopoly Citizens pay for firemen, policemen, garbage collection, street repairs, and other taxes As a result they have no choice but to pay In the past these agencies did not know what was best and how to provide it, they just set the price Now, they recognize the importance of providing quality services and have information available in more convenient ways, an example is: E-government-info available on web

MARKETING Chapter 4 61 Marketing By Non-Business Organizations Nonprofit organizations Do not operate off of profit motive, however still need resources to provide the services They often rely on fundraising Must convince people of the value of their service, and the need to support the organization