Chapter 10
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LESSON 10-1LESSON 10-1
Marketing Basics
Goals Define important marketing concepts. Identify the steps in a marketing
strategy. Describe the consumer decision-
making process.
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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
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UNDERSTAND MARKETING
Marketing activities Advertising Brand names on clothes & packages Websites for products Warehousing Distributing Credit functions Gathering customer data
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UNDERSTAND MARKETING Marketing businesses
Ad agencies Market research firms Transportation cos.
Trucking Ups Dhl FedEx
Financial services Banking, credit
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MARKETING FUNCTIONS
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>> C H E C K P O I N T
Define marketing and the seven marketing functions.
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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
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Develop a successful Marketing StrategyMarketing Orientation
Consider the needs of customer when developing the marketing mix. Don’t assume you know customers
wants.
Research Cruise ship example pg. 240
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UNDERSTAND CUSTOMERS
Two typesFinal consumerBusiness consumer
Consumer decision-making5 Steps
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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.
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Buying MotivesWhat motivates you to buy?
Emotional Gifts for loved ones Security
Rational Logic
Cars College costs
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LESSON 10-2LESSON 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.
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CREATE AND IMPROVE PRODUCTS
3 possibilities1. Totally new products
2. Major improvements in existing products
3. Minor improvements in existing products
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PLAN MARKETING RESEARCH
Steps in marketing research1.1. 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.
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TYPES OF RESEARCH STUDIES
SurveysFocus groupsObservationsExperiments
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PRODUCT PLANNING
Parts of a product Basic product Features (options)
Enhancement to basic product Cell phones
Brand names Packaging
Identifiable Easy to grab
Warranty
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PRODUCT PLANNING
Product planning procedures Idea development Idea screening Strategy development Production and financial planning Limited production and test marketing Full-scale production
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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
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LESSON 10-3LESSON 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.
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VALUE AND PRICE
Buyers usually want to pay the lowest price possible.
Sellers want to charge the highest price possible.
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PRICING FACTORS
Supply More means less Less means more
and demand More means more Less means less
Uniqueness competition
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PRICING FACTORS
Age Old means less New means more
Season AC’s in winter
Buy off-season
Complexity Convenience
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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.
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PRICE A PRODUCT
Sellingprice
=Product
costs+
Operating expenses
+ Profit
GrossMargin
=Sellingprice
+Product
costs
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PRICE A PRODUCT
Markup Usually expressed as a % of costs 100% means double the costs
Markdown Also a %
Start small then grow
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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
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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.
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Channels of Distribution
Direct Producer to consumer
Examples?? Road-side stands Dell Computers
Indirect One or more business help get it to consumer
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LESSON 10-4LESSON 10-4
Plan Promotion
Goals Justify the importance of
communication in marketing. Identify and describe the common types
of promotion.
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COMMUNICATION
Communicating through promotion The way businesses communicate with us
Ads Radio, TV, Internet, Print (Mags, Newspapers)
Salespeople Telemarketing Cold-calling
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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
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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
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MASS PERSONALIZATION
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