Transcript Products Services - chriswilliams

Objective 3.01
Understand the Principles of
Marketing.
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Functions of Marketing
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Functions of Marketing
• What happens during the marketing
process?
– Businesses are involved in the process of
origin, pricing, promotion, and distribution of
products and services.
– These products and services are made
available in order to meet the goals of
individuals and businesses.
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Functions of Marketing
Seven functions of marketing:
– Product/service management
– Distribution
– Selling
– Marketing-information management
– Financing
– Pricing
– Promotion
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Functions of Marketing
• Product/service management may include
several businesses involved with designing,
developing, maintaining, improving, and
obtaining products and services in order to meet
the needs of customers.
• Distribution (Place) involves using the best
ways for customers to locate, obtain, and use
the products and services of a business.
Functions of Marketing
• Selling involves communicating directly with
potential customers in order to determine and
satisfy their needs and wants.
• Marketing-information management involves
obtaining, managing, and using information
about products and services, customers, and
competitors to improve business decisionmaking and the performance of marketing
activities.
Functions of Marketing
• Financing involves budgeting for marketing
activities, securing necessary funds for
operations, and providing financial assistance to
customers.
• Pricing involves determining and
communicating the value of products and
services.
• Promotion involves communicating information
such as features and prices about products and
services to potential customers.
Importance of Marketing
Research
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Marketing Research
• What is marketing research?
– Using customers in order to find solutions to
problems through carefully designed studies.
• Steps in marketing research:
Define the marketing problem.
Study the situation.
Develop a data collection procedure.
Gather and analyze information.
Propose a solution.
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Marketing Research
Types of Research Studies
– Surveys
– Focus groups
– Observations
– Experiment
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Marketing Research
Parts of a Product
– Basic product
• simplest form of a product or service
– Product features
• additions and improvements to the product or
service
– Options
• choices of the product or service
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Marketing Research
Parts of a Product
– Brand name
• a company’s unique identification for a product or
service
– Packaging
• the protection and security of a product or service
before it is used
– Warranty
• an offer to repair, replace, or provide a refund a
product or service in order to build the confidence
of consumers in a business
Marketing Research
Similarities of products and services
• Meet the needs or satisfaction of a target
market
• Include a mix of the marketing elements
(product, price, promotion, and
distribution)
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Marketing Research
Differences between products and services
Products
Tangible
Perishable
Inseparable
Easier to market
More control over quality
Services
Intangible
Non-perishable
Separable
More difficult to market
Less control over quality
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Selling Prices of
Products and Services
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Selling Prices of
Products and Services
• What factors influence the pricing of
products and services?
– Supply and demand
– Uniqueness
– Age
– Season
– Complexity
– Convenience
– Pricing formula
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Selling Prices of
Products and Services
Selling Price = Product Costs + Operating
Expenses + Profit
Example: $215=67+38+100
Selling Prices of Products and
Services
• Markup
– The amount charged of the selling price to
cover the operating expenses and profit
usually stated as a percent.
– Selling price = product cost + markup
– Example: $35 * 40% = $14
– $35 + $14 = $49
• Markdown
– A reduction from the original selling price.
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Channels of Distribution
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Channels of Distribution
• What is channel of distribution?
– How products and services reach final customers and
the businesses involved
How do the needs between producers and
consumers differ? They differ by:
• Quantity
– Businesses produce or sell massive quantities of
products and services, where as each consumer
needs fewer numbers.
• Assortment
– Businesses usually specialize in producing a specific
type of products and services, where as consumers
usually purchase a variety of products and services.
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Channels of Distribution
How do the needs between producers and
consumers differ? They differ by:
• Location
– Businesses may distribute products and services to
customers in other countries as well in local
communities. Consumers make purchases near
home.
• Timing
– There could be a gap in time when businesses
produce products and services as to when consumers
need them.
Channels of Distribution
Types of channels of distribution:
• Direct
– Exchange of products and services between
producer and consumer only.
– Tonya makes and sells cakes to local customers.
•
Indirect
– Exchange of products and services with one or
more business and consumer
– UPS delivers packages for American Eagle.
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Main Types of Promotion
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Main Types of Promotion
• Effective communication consists of an
understanding of information between the
sender and the receiver.
• The sender selects a channel of
communication and the receiver indicates
understanding by providing some form of
feedback.
• What is the relationship between effective
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communication and promotion?
Main Types of Promotion
• Businesses use promotion to
communicate with potential customers
about their products and services.
• Information about products and services is
encoded in a promotional message.
– Advertisements and sales representatives.
• Customers decode the message and
provide feedback
– Purchasing or inquiring about products or
services.
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Main Types of Promotion
• Main types of promotion:
– Personalized is customized for individual customer.
– Mass is communicated with many people with a
common message.
• Types of mass promotion:
–
–
–
–
Advertisement
Publicity
Public relations
Sales promotion
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