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Marketing

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is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

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Marketing Activities

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There are less obvious but equally important marketing activities such as accepting credit cards, storing products, gathering data on consumers, and even marketing products to other businesses

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Marketing Businesses

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all business complete some marketing, and marketing businesses include advertisement agencies and marketing research firms

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Marketing functions

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Product and service management, Distribution, selling, marketing information management, financial analysis, pricing, and promotion

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Product and service management

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is designing, developing, maintaining, improving, and acquiring products and services that meet consumer needs.

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Distribution

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determining the best ways for customers to locate, obtain, and use the products and services of an organization. Careful shipping, handling, and storing of products are needed for effective distribution.

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Selling

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is communicating directly with potential customers to determine and satisfy their needs (can be face to face, on the phone, or video conferences)

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Marketing-information management

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is obtaining, managing, and using market information to improve business decision-making and the performance of marketing activities.

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Financial analysis

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is budgeting for marketing activities, obtaining the necessary funds needed for operations, and providing financial assistance to customers so they can purchase the business' products and services.

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Pricing

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is setting and communicating the value of products and services.

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Promotion

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is communicating information about products and services to potential customers.

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Marketing Strategy

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Marketing activities often cost 50 percent or more of the selling price of a product or service.

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Marketing planning

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aimed at satisfying customer needs better than competitors do, resulting in sales and profits

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Marketing Strategy

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Company's plan that identifies how it will use marketing to achieve its goals. (2 step process)

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Target market

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is a specific group of consumers who have similar wants and needs

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Marketing mix

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is the blending of four marketing elements—product, distribution, price, and promotion.

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Develop a Successful Marketing Strategy

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They produce a product and then begin to plan how they will market it to consumers.

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Marketing orientation

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considers the needs of customers when developing a marketing mix. They use research to study customers and their needs.

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Understand Customers

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Effective marketing begins with customers.

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Final consumers

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are persons who buy products and services mostly for their own use.

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Business consumers

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are persons, companies, and organizations that buy products for the operation of a business, for incorporation into other products and services, or for resale to their customers.

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Consumer decision-making process

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the specific sequence of steps consumers follow to make a purchase

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Steps in the Consumer Decision-Making Process

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1. Recognize a need. 2. Gather information. 3. Select and evaluate alternatives. 4. Make a purchase decision. 5. Determine the effectiveness of the decision.

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Buying motives

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the reasons consumers decide what products and services to purchase

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Emotional buying motives

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are reasons to purchase based on feelings, beliefs, and attitudes.

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Rational buying motives

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are guided by facts and logic.

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Create and Improve Products

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In many cases, products that are identified as new in a company's advertising are not new at all.

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Marketing Research

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finding solutions to problems through carefully designed studies involving consumers

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Plan marketing research

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includes secondary and primary research

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Secondary research

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Analyzing existing information gathered for another purpose but used to solve a current problem

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Primary research

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Studies carried out to gather new information specifically directed at a current problem

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Types of Research Studies

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surveys, focus groups, observations, and experiment

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Surveys

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gather information from people using a carefully planned set of questions.

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Focus Groups

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gathers the ideas, experiences, and opinions from a small number of consumers who take part in group discussion

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Steps in marketing research

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define the marketing problem, study the situation, Develop a data collection procedure, Gather and analyze information, propose a solution

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Observations

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collect information by recording the actions of consumers rather than asking them questions

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Experiment

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presents two carefully controlled alternatives to subjects in order to determine which is preferred or has better results.

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Product planning

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the product must be available through effective distribution and must have affordable prices, you must be aware of the product through effective promotion, and know how it will meet your needs, and most importantly, a business must plan the product to make sure it meets the needs of the target market

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Parts of a product

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basic product, addition of product features, choices called options, brand name, packaging

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Product

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everything a business offers to satisfy customer's needs

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Basic Product

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simplest form of a product, not unique and usually available from several companies

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Product features

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additions and improvements to the basic product

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Options

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choices of product features

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Brand name

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provides unique identification for a company's product

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Packaging

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protection and security for the product before it is used

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Product planning

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company invests several million dollars and spend years to develop a new product. Many people are involved in creating the product idea, determining how it will be produced and marketed, analyzing costs, and predicting sales

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Idea development

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is a creative process with ideas coming from many sources

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Idea Screening

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companies investigate the demand for a product and what the competition offers

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Strategy Development

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they determine who to sell the product to and if there is a strong need for the new product

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Production and Financial Planning

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company develops production procedure, identifies the facilities, equipment, and people that will be needed to produce the product, and the costs of production and marketing are determined, financial plan is developed

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Limited Production and Test marketing

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if product is approved, they may produce a small amount to make sure it will sell on a smaller scale

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Full Scale Production

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tracking how the product sell to make sure it is meeting its goals and competitors might also introduce their own version of the product if it does well

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Services

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are activities that are consumed at the same time they are produced.

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Intangible

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meaning that they have no physical form

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Inseparable

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meaning that they are consumed at the same time they are produced.

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Perishable

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meaning that the availability of a service must match the demand for that service at a specific time.

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Heterogeneous

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meaning that there will be differences in the type and quality of service provided.

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Service marketing

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Using the two-step marketing strategy, identify target markets for services, develop a marketing mix that appeals to the market (includes distribution, pricing, and promotion of the service)

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Value and price

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determining the best price for a product is a difficult marketing challenge.

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Pricing factors

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people opinions on price differ and there are specific factors that influence the price paid for a product

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Supply and demand

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if demand for a product is high, prices will increase. Products with low levels of demand will have comparatively low prices.

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Uniqueness

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When a product has few close competitors because it is unique, the price will be higher than products that are very similar to others.

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Age

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When products are first introduced to the market, prices will be quite high. As products age, the price gradually decreases.

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Season

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Many products are used at a particular time of the year.

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Complexity

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highly complex and technical product have higher prices

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Convenience

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the more convenient it is, the higher the prices the customer is willing to pay for a product

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Price a product

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changes depending on where it is sold

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Price

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is the money a customer must pay for a product or service.

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Selling price

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is the price paid by the customer for the product.

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Product costs

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are the costs to the manufacturer of producing the product or the price paid by other businesses to buy the product.

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Operating expenses

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are all expenses of operating the business that are associated with the product.

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Profit

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is the amount of money available to the business after all costs and expenses have been paid.

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Gross margin

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is the difference between the selling price and the product costs.

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Markup

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is the amount added to the cost of a product to set the selling price.

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Markdown

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is a reduction from the original selling price.

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Markup on cost formula

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Product costs × Percent markup = Markup on cost

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Markup on selling price formula

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Gross margin ÷ Selling price = Percent markup on selling price

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Channels of distribution

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the route a product follows and the businesses involved in moving a product from the producer to the final consumer

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Distribution

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is the locations and methods used to make a product or service available to the target market.

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Need for distribution channels

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difference in quantity, difference in assortment, difference in location, difference in timing

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Channels and challenge members

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all marketing functions and activities are performed by a channel member or by the consumer

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Channel members

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the businesses that take part in a channel of distribution

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Direct channel of distribution

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products move from the producer straight to the consumer with no other organization participating

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Indirect channel of distribution

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includes one or more other businesses between the producer and consumer

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Wholesalers

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are intermediaries between manufacturers and retailers.

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Title

answer

ownership of goods

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Retailers

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are the final business organization in an indirect channel of distribution for consumer products

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