1. THE BASICS OF MARKETING
CHAPTER 04
4/24/2017
THE BASICS OF MARKETING
4.1 Changes in Today’s Marketing
4.2 Planning a Marketing Strategy
4.3 Deciphering Consumers and Competitors
4.4 Marketing’s Role in Various Businesses
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MARKETING

2. Changes in Today’s Marketing
GOALS for Lesson 4.1
Explain how marketing today differs from the way things were done in the past.
Show why understanding customer needs is crucial, even with a superior product.
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3. Recognizing How Marketing Has Changed
Understanding the Differences
From few to many
Earliest use was to move products from producer to consumer.
From independent to integrated
Much more effective
From problems to opportunities
From expense to investment
Reducing Marketing efforts when faced with financial problems is the wrong answer.
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4. Marketing Functions Product/Service Management Distribution Selling
Marketing-Information management
Financing
Pricing
Promotion
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5. Business Functions Production Operations Accounting and Finance
Management and Administration
Marketing
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6. Marketing Concept
Using the needs of customers as the primary focus during the planning, production, distribution, and promotion of a product or service.
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7. Coming To Grips with the Marketing Concept
Reliable Auto Service – read pg. 89
Dee’s Designs – read pg. 90
Focus on customer needs
Must use the Marketing Concept..
Huh? …using the needs of customers as the primary focus during the Planning, Pricing, Distribution, and Promotion of a product or service. Got it?
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8. What Went Wrong They were concerned only about the product or service
They believed that they knew what customers would buy
They did not study the market
They failed to use a variety of marketing tools available to them
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9. Important points to remember…
The primary focus of the MARKETING CONCEPT is the needs of the customer. Businesses often fail because they don’t understand and use the MARKETING CONCEPT.
Marketers are constantly looking for new Markets.
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10. PLANNING A MARKETING STRATEGY
GOALS for Lesson 4.2
Understand how the marketing concept transforms business planning.
Explain the importance of market segments and market opportunity analysis.
Discuss how businesses develop the right marketing mix.
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11. Putting Marketing Up Front
Planning that identifies how a company expects to achieve its goals is known as a strategy.
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12. 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.
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13. Understanding the Customer
Identifying customer needs (1st!)
Satisfying customer needs
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14. Understanding the Customer
Identifying Customer Needs
Many customers are not sure of their needs or may have conflicting needs
Customers may have needs, but they typically have limited amounts of money available to satisfy those needs
Individuals and groups of consumers might have different perceptions on what products will meet their needs
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15. 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.
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16. Understanding the Customer
Satisfying Customer Needs
Market Research leads to Market Segments (groups of similar consumers within a larger market)
Market Opportunity Analysis – studying and prioritizing market segments to locate the best potential based on demand and competition.
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17. Planning the Offering Creating the Right Mix Product development
Distribution decisions
Pricing products and services
Planning promotion
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18. Product Development
Making your brand different and better than those offered by competitors.
Types of parts used
Color, size, operation, accessories
Services that come along with the product (guarantees or warranties)
Packaging
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19. Distribution Decisions
Important impact on customer satisfaction by making the product available (convenience)
Channels of distribution must be efficient and effective
Minimal exchanges between producer and consumer
Manufacturers must rely on wholesalers and retailers
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20. Pricing Products and Services
Businesses must develop specific procedures to set prices that are competitive and allow the business to make a profit
What is the pricing objective (increase sales, maximize profit, similar pricing)
Calculating the price (make sure to include all expenses)
Discounts, markdowns, coupons, rebates, financing
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21. Planning Promotion
Effective Promotions must have an impact on the consumer
Types of promotions – advertising, personal selling, sales promotion, visual display, and publicity
Each method has different costs and reaches different amounts of people
Used to communicate the value and benefits of the product
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22. Combining Parts of the Marketing Mix
Satisfied customers
Product
Promotion
Distribution
Price
Product that offers choices
Distribution that provides convenience
Satisfied customers
Price that gives value
Promotion that aids decision-making
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23. In Groups
Create an effective marketing mix for an Auto Parts Store. You should consider the four parts of the marketing mix and consider how each of those parts affect one another. Each plan should have reasons for the marketing choices that were made.
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24. DECIPHERING CONSUMERS AND COMPETITORS
GOALS for Lesson 4.3
Detail the stages of consumer decision-making.
Understand how businesses should respond to various types of competition.
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25. Stages in Consumer Decision-Making
Recognize – consumer, “a need exists”
Identify – interest leads to identifying products/services that relate
Evaluate – check your choices
Decide – select, gather more info., or do nothing
Assess – how much satisfaction?
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26. GOOD STUFF……..
Most of us use this process – we don’t really choose in a unique manner.
Remember the order…R.I.E.D.A.
The process causes decisions being made to become routine.
What can VALUE look like?
Higher quality, more service, lower prices…
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27. Stages in Consumer Decision-Making
Recognizing a need
Identifying alternatives
Evaluating choices
Making a decision
Determining satisfaction
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28. Responding to Competition
#1 Intense competition – in a market with pure competition, or oligopolistic, how do I differentiate myself? Coke vs. Pepsi? Price? Promotion? Distribution?
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29. Responding to comp.#2
#2 Limited competition – monopoly? Keep competitors out, protect location, keep uniqueness
Customers of a monopoly can become dissatisfied (due to lack of choice).
Avoid dissatisfaction by using…THE MARKETING CONCEPT!
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30. Responding to comp.#3
#3 Monopolistic competition- need clearly identified differences in product/service.
Focus on specific groups and identify their needs.
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31. MARKETING’S ROLE IN VARIOUS BUSINESSES
GOALS for Lesson 4.4
Explain the various marketing roles of different types of businesses.
Examine how marketing is useful for organizations other than businesses.

32. Differentiating Business Roles
Producers and manufacturers – “Product” and “Distribution” important
Channel members – financing, distribution, final pricing decisions, promotion
Service businesses – don’t normally use “Distribution”…why not?
Hard to determine the appropriate price or to compare services…why?

33. Markups and Margins Middlemen add markup
Markup – difference between the price a business pays for a product and the price it plans to sell the product for.
Gross Profit Margin is the difference between the price a product sells for and the amount a business pays for it.
Retailer pays $1 for a product, and sells it for $1.50…
Markup is .50/1.00 = 50%
Gross Profit Margin is .50/1.50 = 33%
Middlemen add markup

34. Marketing By Non-Business Groups
Museums
Libraries
Symphonies
Athletic teams
Churches
Clubs
Mistakes made frequently include…
1) improper development of
“The Marketing Plan”
2) Emphasized Promotion
3) Treat people as if they have
the same wants and needs.