1. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Nature and Scope of Marketing 20.1 20.1 Nature of Marketing 20.2 20.2 Elements of Marketing 20.3 20.3 Marketing Plan CHAPTER 20

2. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e 20.1 20.1 Nature of Marketing GOALS ● Discuss the importance of marketing and its role in the economy. ● Describe the factors that are part of the nature of marketing. 2 CHAPTER 20

3. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Importance of Marketing ● Marketing—a set of activities that gets products from producers to consumers ● Marketing activities help match productions and consumption ● Effective marketing creates and maintains relationship between sellers and buyers ● Retailers—businesses that sell directly to final consumers ● Wholesalers—businesses that buy products from businesses and sell them to other businesses 3 CHAPTER 20

4. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Importance of Marketing ● The role of the marketing manager ● Coordinate marketing functions across departments to meet customer needs ● Marketing jobs include: advertising, sales promotion, customer service, credit, and insurance ● 1/3 of people employed in US work in a marketing job or marketing business 4 CHAPTER 20

5. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e ©2013 Cengage Learning. All Rights Reserved. Marketing’s Role in Top Management 5 CHAPTER 20

6. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e ©2013 Cengage Learning. All Rights Reserved. Nature of Marketing ● Marketing activities ● Buying ● Selling ● Transporting ● Storing ● Financing ● Researching ● Risk taking ● Grading and valuing 6 CHAPTER 20

7. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e ©2013 Cengage Learning. All Rights Reserved. Nature of Marketing ● Cost of marketing ● Approximately ½ or more than ½ of the price you pay for a product may result from the marketing expenses ● Role of marketing ● Production-oriented—decisions about what and how to produce received the most attention ● Sales-oriented—emphasize widespread distribution and promotion to sell their products ● Customer-oriented—activities directed towards satisfying the customers 7 CHAPTER 20

8. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e 20.2 20.2 Elements of Marketing GOALS ● Describe the role that market determination plays in marketing. ● Define basic marketing concepts and the four elements of the marketing mix. 8 CHAPTER 20

9. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Market Identification ● Market—refers to the types of buyers a business whishes to attract and where those buyers are located ● Whom to serve ● Business identifies potential customers based on population and characteristics ● Cost wise, unwise to try to reach all potential customers 9 CHAPTER 20

10. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Market Identification ● Where to serve ● Find best marketing location to achieve most sales for its marketing dollar 10 CHAPTER 20

11. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Market Identification ● Identifying target markets ● Market research—study of a company’s current and prospective customers ● Companies spend time on market research before they begin product development ● Target markets—groups of customers with similar needs to whom the company plans to sell its product 11 CHAPTER 20

12. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e ©2013 Cengage Learning. All Rights Reserved. Positioning Chart for Target Markets for Bicycles 12 CHAPTER 20

13. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e The Marketing Mix ● Marketing mix– the blending of the four elements of: 1. Product 2. Price 3. Distribution (place) 4. Promotion 13 CHAPTER 20

14. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e The Marketing Mix ● Product—both tangible and intangible, customers receive for the purchase price ● Price—the amount of money given to acquire a product ● Difficult marketing decision 14 CHAPTER 20

15. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e The Marketing Mix ● Distribution (place)—set of activities required to transport and store products ● Place utility—the product must be in a place where customers need or want it ● Also includes actual physical handling of the product ● Promotion—providing information to consumers to assist them in making a decision ● Advertising and personal selling 15 CHAPTER 20

16. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e 20.3 20.3 Marketing Plan GOALS ● Describe the role of a marketing plan. ● Explain the four stages of the product life cycle. ● Identify the consumer goods classifications. 16 CHAPTER 20

17. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Developing a Marketing Plan ● Marketing plan—detailed written description of all marketing activities that a business must accomplish in order to sell its products; written for a specific time period, often one year 17 CHAPTER 20

18. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e The Product Life Cycle ● Products move through predictable stages through their product lives ● Both profits and sales decline as newer products replace old ones 18 CHAPTER 20

19. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e The Product Life Cycle ● Introduction stage ● Brand-new products enter the market ● Growth stage ● Customers like the new products, more customers become regular purchasers 19 CHAPTER 20

20. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e The Product Life Cycle ● Maturity stage ● The product is competing with other brands with very similar features ● Companies emphasize promotion ● Brand name, packaging, specific image, price ● Decline stage ● A new product is introduced that is better and easier to use 20 CHAPTER 20

21. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e ©2013 Cengage Learning. All Rights Reserved. Product Life Cycle 21 CHAPTER 20

22. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Product Categories ● Industrial goods—products designed for use by another business ● Consumer goods—products designed for personal or home use 22 CHAPTER 20

23. ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e Product Categories ● Types of consumer products ● Convenience goods—inexpensive items that consumers purchase regularly without a great deal of thought ● Shopping goods—products consumers buy less frequently, usually have a higher price ● Specialty goods—products customers insist on having and willing to search for ● Unsought goods—customers do not shop for some products because they do not have a strong need for them 23 CHAPTER 20