Transcript Chapter 10 Notesx

Marketing
Chapter 10
Lessons
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Marketing Basics
Develop Effective Products and Services
Price and Distribute Products
Plan Promotion
Essential Question:
How is marketing planned and executed to
satisfy customer needs at a profit?
10-1: Marketing Basics
Understand Marketing
• Most visible set of business activities to
consumers
• Marketing: an organizational function and set
of processes for creating, communicating,
and delivering value to customers and for
managing customer relationships in ways that
benefit the organization and its stakeholders
10-1: Marketing Basics
Marketing Businesses
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Advertising agencies
Marketing research firms
Transportation companies
Shipping and delivering companies
Financial services companies
Wholesalers and retailers
• Important part of U.S. economy!
10-1: Marketing Basics
Seven Functions of Marketing
1. Distribution
shipping, handling, storing; best way for customers
to locate, obtain, and use products
2. Financial Analysis
company marketing budget, obtaining marketing
funds, and customer payment options
3. Marketing Information Management
market research to improve the business
4. Pricing
setting and communicating value; making a profit
10-1: Marketing Basics
Seven Functions of Marketing
5. Product/Service Management
obtaining information, developing and maintaining
products to compete in the market
6. Promotion
communication to attract customers
7. Selling
communicating directly with customers to determine
and satisfy needs
relationship marketing: building customer loyalty
through good customer relations
10-1: Marketing Basics
Marketing Strategy
• Marketing strategy: a company’s plan that
identifies how it will use marketing to achieve
its goals (satisfy customer needs to make a profit)
• It all comes down to knowing your market
• Promote to a specific, smaller, audience
• Don’t assume you know what customers want
• Do research to understand what people want to
buy and why they want to buy it
• Marketing orientation: an approach that considers
the needs of customers
10-1: Marketing Basics
Steps to Developing a
Marketing Strategy
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Identify a Target Market
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a specific group of
consumers who have
similar wants and needs
Create a Marketing Mix
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The blending of four
marketing elements:
product,
distribution,
price, and
promotion
10-1: Marketing Basics
Cruise Ship Company Example
1. Research potential customers
2. Select target market
3. Use research gathered to develop marketing mix
Product
Create an exciting / relaxing
experience, onboard activities,
excursions at scheduled stops
Distribution
Travel documentation, arranging
passenger travel from port to port,
handling baggage
Pricing
Affordable for target market,
payment options
Promotion
Offer information to interest
customers, travel agent sales,
advertising, special offers
10-1: Marketing Basics
Types of Customers
1. Final consumers: people who buy products
and services mostly for their own use
2. Business consumers: people, companies,
and organizations that buy products for a
business, for incorporation into other
products or services, or for resale to
customers
10-1: Marketing Basics
Customer Decision-Making
& Buying Motives
Customer decision-making
process: specific sequence
of steps consumers follow to
make a purchase
Buying motives: the reasons
consumers decide what
products and services to
purchase
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Emotional:
based on feelings, beliefs,
and attitudes
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Recognize a need
Gather information
Select and evaluate
alternatives
Make a purchase decision
Determine effectiveness of
decision
Rational:
guided by facts and logic
10-2: Develop Effective Products and Services
Marketing Research
Finding solutions to problems through carefully
designed studies involving consumers
Secondary research: analyzing
existing information gathered
for another purpose
Steps in Marketing Research
1. Define the marketing problem
2. Study the situation
Primary research: studies
carried out to gather new
information directed at a
current problem
3. Develop a data collection system
4. Gather and analyze information
5. Propose a solution
10-2: Develop Effective Products and Services
Types of Research Studies
• Surveys: gather information using a carefully planned
set of questions
• Focus groups: small group of people take part in a
group discussion sharing ideas, experiences, and
opinions
• Observations: record actions of consumers
• Experiments: presents two carefully controlled
alternatives to determine which is preferred or has
better results
10-2: Develop Effective Products and Services
Product Planning
• The most important part of the marketing mix
(if the product is not what you want, the effectiveness of the
other elements does not matter)
• Product: everything a business offers to satisfy customer needs
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Basic product: simplest form of a product
Product features: additions and improvements to the basic
Options: choices of features
Brand name: provides unique identification
Packaging: provides protection and security for the product
before it is used, or makes storage and use easier
• Guarantee or warranty: builds customer confidence
10-2: Develop Effective Products and Services
Steps to New Product Planning
1. Idea Development
brainstorm and collaborate for creative ideas
2. Idea Screening
evaluate and screen for consumer demand
3. Strategy Development
develop a full marketing strategy along with
alternatives to compare and determine which
provides the greatest value
10-2: Develop Effective Products and Services
Steps to New Product Planning
4. Production and Financial Planning
develop productions procedures, identify resources
needed, along with costs to make a profit
5. Limited Production and Test Marketing
produce limited quantity and test in small market
6. Full-Scale Production
full production and marketing, gather info on
production, sales, and competition
10-3: Price and Distribute Products
Value and Price
Pricing Factors:
Price a Product:
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• Price: the money a customer must
pay for a product or service
Supply and demand
Uniqueness
Age
Season
Complexity
Convenience
Product
costs
Operating
expenses
• Gross margin: difference between
the selling price and production
costs (represents $ on hand to
pay for operating expenses and
provide a profit)
profit
Selling
price
10-3: Price and Distribute Products
Channels of Distribution
• Distribution: locations and methods used to make a
product or service available to a target market
• Channel of Distribution: the route a product follows
and the businesses involved in moving a product
from the producer to the final consumer
• The biggest impact distribution has on marketing is
how it affects the price of products
• Each time a product goes through another
channel, the cost of marketing it increases
10-3: Price and Distribute Products
Channels
• Direct distribution: selling goods or services
directly from producers to consumers without
using intermediaries
• Indirect distribution: moving goods from
producers to consumers using one or more
intermediary
10-3: Price and Distribute Products
Channel Members
Intermediaries:
• Distributors
• Represents a single manufacturer in a geographic
area
• Ex. Cosmetics, cars, furniture, and shoes are sold
through distributors
• Wholesalers
• Receives large shipments of products from many
different producers and breaks them into smaller
batches for resale
10-3: Price and Distribute Products
Channel Members
• Retailers
• Sells goods directly to the customer
• Internet
• Encourages producers to distribute their products
themselves (a virtual business allows customers
to order online)
10-4: Plan Promotion
Promotion
• Any form of communication used to inform,
persuade, or remind
• Used to influence knowledge, beliefs, and
actions about products or services
• Types:
• Personalized promotion
• Mass promotion
10-4: Plan Promotion
Personalized Promotion
• Communicates directly with each customer using information
tailored to that person
• Most effective but most expensive
• Personal selling: direct, individualized communication with
prospective customers to assess their needs and assist them in
satisfying those needs with appropriate products and services
• Done face-to-face, over the phone, or on the Internet
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a good salesperson gathers customer information, studies
product info, communicates with customer, demonstrates
product, helps make decision, arranges payment, follows-up
with customer to ensure satisfaction
10-4: Plan Promotion
Mass Promotion
• Communicates with many people at the same time with a
common message
• Use mass media; Cost per customer is low
• Advertising: any paid form of communication through mass
media directed at identified consumers to provide information
and influence their actions
• Designed to attract attention and focus the consumer on a small
amount of specific information
• Television, radio, newspapers, magazines, mass mailings,
outdoor displays, and Internet advertising attempt to influence
consumer actions (visit a store, gather info, or test a product)
10-4: Plan Promotion
Mass Promotion Continued
• Publicity: non-paid promotional communication presented by the
media rather than by the business that is being promoted
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Ex. company or product featured on the news
• Public relations: an ongoing program of non-paid and paid
communications planned to favorably influence public opinion
about an organization, marketing effort, idea, or issue
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Ex. company supporting community initiatives
• Sales promotion: includes activities and materials designed to
reinforce a company’s brand and image; also a direct incentive
to take action likely to immediately increase sales
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Ex. contests, games, giveaways, incentives, frequent buyer plans
Nike Print Advertising
Nike Outdoor Advertising
Nike TV Advertising
Nike Internet Advertising
Nike Publicity
Nike Sales Promotions
VIP rewards program
Nike Sales Promotions