Principles of Business and Finance: 3.01 Part B – Flashcards
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Functions of Marketing
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marketing process Activities of marketing happen throughout the seven functions of marketing
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What happens during the marketing process?
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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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Seven functions of marketing:
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Product/service management Distribution (Place) Selling Marketing-information management Financing Pricing Promotion
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Product/service management
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may include several businesses involved with designing, developing, maintaining, improving, and obtaining products and services in order to meet the needs of customers
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Distribution (Place)
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involves using the best ways for customers to locate, obtain, and use the products and services of a business
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Selling
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involves communicating directly with potential customers in order to determine and satisfy their needs and wants
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Marketing-information management
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involves obtaining, managing, and using information about products and services, customers, and competitors to improve business decision-making and the performance of marketing activities
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Financing
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involves budgeting for marketing activities, securing necessary funds for operations, and providing financial assistance to customers.
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Pricing
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involves determining and communicating the value of products and services
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Promotion
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involves communicating information such as features and prices about products and services to potential customers
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Marketing Research
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Marketing research involves customers in order to find solutions to problems through carefully designed studies.
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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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Types of research studies
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Surveys Focus groups Observations Experiment
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Parts of a product
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Basic product Product Options Brand name Packaging Warranty
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Basic product
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is simplest form of a product or service.
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Product
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features include additions and improvements to the product or service.
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Options
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include choices of the product or service.
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Brand name
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is a company's unique identification for a product or service.
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Packaging
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is the protection and security of a product or service before it is used.
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Warranty
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is an offer to repair, replace, or provide a refund a product or service in order to build the confidence of consumers in a business.
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Similarities of products and services
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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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Differences between products and services
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Products Services Tangible Intangible Perishable Non-perishable Inseparable Separable Easier to market More difficult to market More control over quality Less control over quality
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What factors influence the pricing of products and services?
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Supply and demand Uniqueness Age Season Complexity Convenience
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Pricing formula
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Selling price = product costs + operating expenses + profit Example: $215=67+38+100
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Markup
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The amount charged of the selling price to cover the operating expenses and profit usually stated as a percent. Example: $35*40%=$14 Selling price = product cost + markup $35+$14=$49
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Markdown
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A reduction from the original selling price.
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What is channel of distribution?
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The channels of distribution is how products and services reach final customers and the businesses involved.
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How do the needs between producers and consumers differ? They differ by:
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Quantity Assortment Location Timing
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Quantity
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Businesses produce or sell massive quantities of products and services, where as each consumer needs fewer numbers.
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Assortment
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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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Location
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Businesses may distribute products and services to customers in other countries as well in local communities.
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Timing
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There could be a gap in time when businesses produce products and services as to when consumers need them.
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Channels of distribution
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allow businesses to adjust quantity and assortments accessible in convenient locations for customers and storage of products.
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Types of channels of distribution:
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Direct Indirect
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Direct
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involves the exchange of products and services between producer and consumer only. Example -Tonya makes and sells drapes to local customers.
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Indirect
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involves the exchange of products and services with one or more business and consumer. Example -UPS delivers packages for Ann Taylor.
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Effective communication
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consists of an understanding of information between the sender and the receiver
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The sender
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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?
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-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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Main types of promotion:
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Personalized Mass
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Personalized
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is customized for individual customer.
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Mass
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is communicated with many people with a common message.
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Some types of mass promotion:
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Advertisement Publicity Public relations Sales promotion
