1. Marketing CH. 4 Notes

2. The Basics of Marketing
Marketing today is different from marketing only a few years ago
It has expanded from a few activities to a variety
The earliest use of marketing was to move products from the producer to the consumer
Then promotion and sales were added to help persuade customers to buy
Today, businesses are able to complete a vast # of marketing activities ranging from research to customer credit

3. From Independence to Integrated
Has changed from an activity that was an independent part of business to one that is well integrated with other business functions
In the past, marketing was not well understood so they would often work by themselves
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

4. 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
Today’s businesses can’t afford to wait until problems occur, so they are continuously looking for market opportunities
Ways to improve a companies offerings in current markets
It is responsible for identifying and planning opportunities

5. Putting Marketing Up Front
Successful businesses use carefully prepared
plans to guide their operations
The business will use a strategy for how it expects
to achieve its goals
To develop this strategy businesses should use the
marketing concept
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.

6. How Does the Marketing Concept Affect Planning?
Without the Marketing Concept
With the Marketing Concept
Develop a Product
Conduct research to identify potential customers and their needs
Decide on marketing activities
2. Develop a marketing mix (4Ps) that meets specific customer needs.
Identify potential customers

7. 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

8. 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
Businesses tend to deal with customers in two ways
Some businesses don’t view the specific needs of customers as important. They believe if they can effectively produce and market products customer will buy
Understanding customers is an important part of business activities

9. 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
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 need, the most resources, and the least competition
Once segments have been identified and prioritized, the business selects those segments on which it will focus its efforts

10. Consumers 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
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

11. Stages of a Decision
Step 1. 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
Step 2. Identify- When the consumer becomes interested in finding a solution
Identifying products or services that relate to the need
Step 3. 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
Step 4. 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
Step 5. 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

12. 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
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

13. Responding to Competition
1. 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)
Limited Competition
Some businesses have the advantage of having little or no direct competition
Ex- Known as a monopoly
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

14. Open Ended Question Recognize Recognizes that a need exists
Cell phone battery will not charge
Identify
Interested in finding a solution
Going to buy a new cell phone, instead of getting the old one fixed
Evaluate
Gathers information to evaluate choices
Go to Verizon and look at available phones
Decision
Decision will be: select one of the available choices, to gather more information, or to do nothing
Buy the phone
Gather info
do nothing
I chose to buy phone
Assess
Consumer determines whether or not the choice was correct
Do not buy the Verizon Droid, it is cheaply made, and breaks easily

15. 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
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

16. 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
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

17. Nonprofit organizations
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
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 by Non-Business organizations
It is not unusual today to see marketing used by museums, libraries, symphonies, athletic teams, churches, and clubs
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