1. Introduction to Business © Thomson South-Western Chapter 10 Slide 1 LESSON 10-1 LESSON 10-1 Marketing Basics Goals Define important marketing concepts. Identify the steps in a marketing strategy. Describe the consumer decision- making process.

2. Introduction to Business © Thomson South-Western Chapter 10 Slide 2 Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives

3. Introduction to Business © Thomson South-Western Chapter 10 Slide 3 UNDERSTAND MARKETING Marketing activities Advertising Brand names on clothes & packages Websites for products Warehousing Distributing Credit functions Gathering customer data

4. Introduction to Business © Thomson South-Western Chapter 10 Slide 4

5. Introduction to Business © Thomson South-Western Chapter 10 Slide 5 UNDERSTAND MARKETING Marketing businesses Ad agencies Market research firms Transportation cos. Trucking Ups Dhl FedEx Financial services Banking, credit

6. Introduction to Business © Thomson South-Western Chapter 10 Slide 6 MARKETING FUNCTIONS

7. Introduction to Business © Thomson South-Western Chapter 10 Slide 7 >> C H E C K P O I N T Define marketing and the seven marketing functions.

8. Introduction to Business © Thomson South-Western Chapter 10 Slide 8 MARKETING STRATEGY Marketing planning Satisfying customer needs better than competitors Develop a successful marketing strategy Identify a target market Consumers who have similar wants & needs Create a marketing mix A blending of the 4 P’s Product, Place( distribution), Price, Promotion

9. Introduction to Business © Thomson South-Western Chapter 10 Slide 9 Develop a successful Marketing Strategy Marketing Orientation Consider the needs of customer when developing the marketing mix. Don’t assume you know customers wants. Research Cruise ship example pg. 240

10. Introduction to Business © Thomson South-Western Chapter 10 Slide 10 UNDERSTAND CUSTOMERS Two types Final consumer Business consumer Consumer decision-making 5 Steps

11. Introduction to Business © Thomson South-Western Chapter 10 Slide 11 STEPS IN THE CONSUMER DECISION-MAKING PROCESS 1. 1.Recognize a need. 2. 2.Gather information. 3. 3.Select and evaluate alternatives. 4. 4.Make a purchase decision. 5. 5.Determine the effectiveness of the decision.

12. Introduction to Business © Thomson South-Western Chapter 10 Slide 12 Buying Motives What motivates you to buy? Emotional Gifts for loved ones Security Rational Logic Cars College costs

13. Introduction to Business © Thomson South-Western Chapter 10 Slide 13 LESSON 10-2 LESSON 10-2 Develop Effective Products and Services Goals Justify the importance of marketing research. Identify the components of a product. Describe how services differ from products.

14. Introduction to Business © Thomson South-Western Chapter 10 Slide 14 CREATE AND IMPROVE PRODUCTS 3 possibilities 1.Totally new products 2.Major improvements in existing products 3.Minor improvements in existing products

15. Introduction to Business © Thomson South-Western Chapter 10 Slide 15 PLAN MARKETING RESEARCH Steps in marketing research 1. 1. Define the marketing problem. 2. 2. Study the situation. 3. 3. Develop a data collection procedure. 4. 4. Gather and analyze information. 5. 5. Propose a solution.

16. Introduction to Business © Thomson South-Western Chapter 10 Slide 16 TYPES OF RESEARCH STUDIES Surveys Focus groups Observations Experiments

17. Introduction to Business © Thomson South-Western Chapter 10 Slide 17 PRODUCT PLANNING Parts of a product Basic product Features (options) Enhancement to basic product Cell phones Brand names Packaging Identifiable Easy to grab Warranty

18. Introduction to Business © Thomson South-Western Chapter 10 Slide 18 PRODUCT PLANNING Product planning procedures Idea development Idea screening Strategy development Production and financial planning Limited production and test marketing Full-scale production

19. Introduction to Business © Thomson South-Western Chapter 10 Slide 19 SERVICES Inseparable Activities that are consumed at the same time they are produced. Intangible No physical form Perishable Must meet the needs at the time needed Heterogeneous Different in type and quality provided Uniqueness of customer and person providing service

20. Introduction to Business © Thomson South-Western Chapter 10 Slide 20 LESSON 10-3 LESSON 10-3 Price and Distribute Products Goals Discuss how the selling price of a product is calculated. Differentiate between a direct and an indirect channel of distribution.

21. Introduction to Business © Thomson South-Western Chapter 10 Slide 21 VALUE AND PRICE Buyers usually want to pay the lowest price possible. Sellers want to charge the highest price possible.

22. Introduction to Business © Thomson South-Western Chapter 10 Slide 22 PRICING FACTORS Supply More means less Less means more and demand More means more Less means less Uniqueness competition

23. Introduction to Business © Thomson South-Western Chapter 10 Slide 23 PRICING FACTORS Age Old means less New means more Season AC’s in winter Buy off-season Complexity Convenience

24. Introduction to Business © Thomson South-Western Chapter 10 Slide 24 PRICE A PRODUCT Selling price What we pay Product costs Costs to produce or buy the product by producer Operating expenses Overhead Salaries, wages, rent, utilities, etc. Profit What’s left after all costs are paid Gross margin Difference between SP & Costs Before OE.

25. Introduction to Business © Thomson South-Western Chapter 10 Slide 25 PRICE A PRODUCT Selling price = Product costs + Operating expenses +Profit Gross Margin = Selling price + Product costs

26. Introduction to Business © Thomson South-Western Chapter 10 Slide 26 PRICE A PRODUCT Markup Usually expressed as a % of costs 100% means double the costs Markdown Also a % Start small then grow

27. Introduction to Business © Thomson South-Western Chapter 10 Slide 27 CHANNELS OF DISTRIBUTION Need for distribution channels Differences in quantity Differences in assortment Differences in location Differences in timing We try to even all these out

28. Introduction to Business © Thomson South-Western Chapter 10 Slide 28 Channels and channel members Businesses takeover the channels when consumers don’t want to. Example You can go and buy produce at a produce stand during the growing season for it. In winter in the LV, not a lot available. Someone took over getting us our produce. Not just Giant, Wegmans, or Weis Trucking cos., wholesalers, etc.

29. Introduction to Business © Thomson South-Western Chapter 10 Slide 29 Channels of Distribution Direct Producer to consumer Examples?? Road-side stands Dell Computers Indirect One or more business help get it to consumer

30. Introduction to Business © Thomson South-Western Chapter 10 Slide 30 LESSON 10-4 LESSON 10-4 Plan Promotion Goals Justify the importance of communication in marketing. Identify and describe the common types of promotion.

31. Introduction to Business © Thomson South-Western Chapter 10 Slide 31 COMMUNICATION Communicating through promotion The way businesses communicate with us Ads Radio, TV, Internet, Print (Mags, Newspapers) Salespeople Telemarketing Cold-calling

32. Introduction to Business © Thomson South-Western Chapter 10 Slide 32 PERSONALIZED PROMOTION Personal selling New cell phone example page 257 Best and Costliest Cold-calling Telemarketing Internet Usually for more expensive products. More preparation by salesperson On products On customer

33. Introduction to Business © Thomson South-Western Chapter 10 Slide 33 MASS PROMOTION Less expensive Less effective TIVO Long-lasting effects PR Favorable objectives Publicity (Image) Not asked for Free Can be good or bad COUPONS GAMES CONTESTS

34. Introduction to Business © Thomson South-Western Chapter 10 Slide 34 MASS PERSONALIZATION COMBO OF BOTH Surveys Web links FAQ