Transcript Production and Business Operations

Objective 3.01
Understand Principles of Marketing
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Topics

Functions of marketing

Importance of marketing research to the
creation or improvement of products or
services

Selling prices of products and services

Classification of channels of distribution

Classification of the main types of
promotion
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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.
Activities of marketing happen throughout
the seven functions of marketing
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Seven Functions of Marketing
1.
Marketing-Information Management

2.
Obtaining, managing, and using
information about products and
services, customers, and competitors
to improve business decision-making
and the performance of marketing
activities
Product/Service Management

Designing, developing, maintaining,
improving, and obtaining products
and services in order to meet the
needs of customers
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Seven Functions of Marketing Continued
3.
Pricing

4.
Place (Distribution)

5.
Determining and communicating the
value of products and services
Using the best ways for customers to
locate, obtain, and use the products
and services of a business
Selling

Communicating directly with potential
customers in order to determine and
satisfy their needs and wants
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Seven Functions of Marketing Continued
6.
Financing

7.
Budgeting for marketing activities,
securing necessary funds for operations,
and providing financial assistance to
customers
Promotion

Communicating information such as
features and prices about products
and services to potential customers
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Importance of
Marketing
Research to the
Creation or
Improvement of
Products or
Services
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Marketing Research

Customers find solutions to problems
through carefully designed studies

Steps in marketing research:
1.
Define the marketing problem.
2.
Study the situation.
3.
Develop a data collection
procedure.
4.
Gather and analyze information.
5.
Propose a solution.
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Types of Research Studies

Surveys


Focus groups


Small groups of consumers that discuss a
specific product
Observations


Specific set of questions asked to consumers
Actions of consumers rather than questioning
them
Experiment

A comparison of two controlled alternatives
for consumers
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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 place (distribution)
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Differences Between Products
and Services
Products
Services
Tangible
Intangible
Non-perishable or perishable
Perishable
Separable
Inseparable
Easier to market
More difficult to market
More control over quality
Less control over quality
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Selling Prices of
Products and Services
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Factors that Influence the
Pricing of Products and
Services

Supply and demand

Uniqueness

Age

Season

Complexity

Convenience
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Pricing Formula

Selling Price = Product Costs + Operating
Expense + Profit

Example: $215 = 67 + 38 + 100
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Markup vs Markdown


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 + $14 = $49

$35 * 40% = $14
Markdown – A reduction from the original
selling price
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Classification of
Distribution and
Promotion
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Classification of Channels
of Distribution

Channels of Distribution – how products and
services reach final customers and the
businesses involved

How does having a channel of distribution
help businesses?

Allows businesses to adjust quantity and
assortments accessible in convenient
locations for customers and storage or
products
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Types of Channels of
Distribution

Direct – the exchange of products and services
between producer and consumer only

Examples:




Tonya makes and sells drapes to local customers
Local cleaning company promotes its business and
provides services to its local customers
Mary sells her famous juices at the local festivals
Indirect – the exchange of products and services
with one or more businesses and consumers

Examples:



UPS delivers packages for Ann Taylor
Drugstores sell Maybelline Cosmetics
Macy’s sells Nautica line of clothing
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How do you know when
communication is effective?
Consists of an understanding of information
between the sender and the receiver.
 Senders selects a channel of communication
and the receiver indicates understanding by
providing some form of feedback.

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What is the relationship between
effective communication and
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

Promotional messages may be delivered
through advertisements and sales
representatives

Potential customers decode the message and
provide feedback by way of purchasing or
inquiring about products or services
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Classification of the Main
Types of Promotion


Personalized

Customized for individual customers

Examples – Visits, Telephone Calls, Live
Audio & Video Internet Connections
Mass

Communication with many people with a
common message

Examples – Advertisements, publicity,
public relations, and sales promotion
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