Marketing Basics CHAPTER 1.1

Transcription

1 Marketing Basics CHAPTER 1.1

2 Opening Act Athletes and entertainers play a prominent role in marketing by endorsing products and services. For example, Radio Shack has had a long run of television commercials featuring former professional football player Howie Long and actress Teri Hatcher. People like to be identified with celebrities and sports stars. Product endorsements by famous people are good marketing strategies. Work with a group. Identify four advertising campaigns that feature other celebrities or athletes. Discuss with the group whether each strategy would affect your decision to purchase those products. Be sure to explain why or why not.

3 About half of every dollar you spend on a product pays for marketing costs.

4 What is Marketing? According to your book: Marketing is planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives. In simpler terms: Marketing is the process of developing, promoting, and distributing products to satisfy customers needs and wants. According to the Encarta World English Dictionary: Marketing is the business activity of presenting products or services in such a way as to make them desirable. Many individuals identify marketing as advertising.

5 Advertising nourishes the consuming power of men. - Winston Churchill British Prime Minister

6 Goods and Services Goods Are the kinds of things you can touch or hold in your hand. Services Automobiles Soft drinks Athletic shoes Computers Are the kinds of things you can t physically touch. Services are tasks performed for a customer. Dry cleaners Movie theaters Video rentals

7 Products Products includes goods and services, both of which satisfy customers needs and wants.

8 Marketing helps connect businesses to their customers. After goods are created, they are sent to the marketplace where they are made available to consumers. The marketplace is the commercial environment where exchanges are made. An exchange takes place every time something is sold in the marketplace.

9 Marketing Mix 4 Ps To perform the tasks associated with marketing, marketers rely on a marketing mix. The marketing mix describes how a business blends the four marketing elements: Product What a business offers customers to satisfy needs. (Place) Distribution Involves the locations and methods used to make products available to customers Athletic uniforms arriving by UPS and turf for a football field arriving by semi-truck are both examples of the distribution function of marketing.

10 Price Is the amount that customers pay for products Price influences the purchasing decisions made by consumers Promotion Describes ways to encourage customers to purchase products and increase customer satisfaction. Promotion includes advertising, publicity, personal selling, and public relations. Forms of promotion can range from television commercials and newspaper advertisements to in-stadium advertising through special offers on the back of ticket stubs, rotating signs, and team mascots entertaining fans. Article

11 The most important aspect of marketing is satisfying customer needs. Customers needs should be the primary focus during the planning, production, distribution, and promotion of a product or service. To satisfy customers needs, you need to perform three activities: You must identify customer needs You need to develop products that customers consider better than other choices You must operate your business profitably

12 Key Marketing Functions

13 Product/Service Management Designing, developing, maintaining, improving, and acquiring products or services so they meet customer needs. Decisions are most often made on the basis of marketing research, which highlights consumer needs and wants. Example: Fisher Price tests new toy ideas with children and parents to make sure kids will play with the toys and parents will buy them for their children.

14 Distribution Determining the best way to get a company s products or services to customers The logistics of physically moving and storing goods are also part of distribution planning. Primary methods of transportation are by truck, rail, ship, or air. Some large retail chains store products in central warehouses for later distribution Distribution also involves the systems that track products so that they can be located at any time.

15 Selling Direct and personal communication with customers to assess and satisfy their needs. Selling involves not only satisfying customers but also anticipating their future needs. Selling in today s world includes purchases made through the Internet.

16 Marketing-Information Management Gathering and using information about customers to improve business decisions making. Most of this information is obtained through marketing research. Surveys Questionnaires Companies conduct marketing research to learn more about their customers preferences and how to better market products. Example: When Domino s first considered expanding operations into Japan, it used its marketing research findings to adapt the traditional Domino s pizza to Japanese tastes.

17 Financing Financing is getting the money that is necessary to pay for the operation of a business. Business owners often obtain bank loans to start a new business. Some also form corporations and sell shares of the business, or stock Also involves decisions about whether to offer credit to customers. Most retailers offer customers payment options such as cash or credit card.

18 Pricing Pricing decisions dictate how much to charge for goods and services in order to maximize profits. Most pricing decisions are based on competitive pricing and determining how much customers are willing to pay. Prices may be set high if the seller knows people will buy at that price. Prices may be set lower if the seller can count on selling a great volume of the good. Example: Tickets for many professional sports events and concerts are often expensive because demand is high.

19 Promotion Promotion is using advertising and other forms of communicating information about products, services, images, and ideas to achieve a desired outcome. Television and radio commercials are forms of promotion known as advertising. Promotion is carried out in other media, including print and online. Promotion is used to improve a company s public image.

20 Example - Key Marketing Functions Product/Service of Management a Cell Phone Research is done to find out what consumers want from a cell phone. Cameras, speakerphones, and improved text messaging compatibility are recent examples. Distribution Large orders to populated areas can use large truck distribution. A larger shipment to a third party retailer is key for a manufacturer, because the retail store then becomes responsible for final delivery. Selling Individual stores like a Verizon or Sprint are highly trained on the phones that they carry. Third party retailers like Best Buy need to know about an assortment of products. Purchases can also be made online without any communication with a person.

21 Marketing-Information Management Different areas may desire special features. In some areas, like the city of Chicago, it is illegal to talk on a cell phone without a hands-free kit while driving. Features like Bluetooth capable phones (for wireless hands-free) are more popular in these areas. Financing The majority of cell phones require a contract. The phones that are available with these contracts are often free or offer a highend phone for a very reasonable price. The cost of making these phones is much higher than what the consumer is paying. The service company, like Verizon, actually buys the phone from the manufacturer at a higher price but makes that loss up by charging a higher fees for the service required to actually use the phone.

22 Pricing As mentioned, free phones are on the market. For some customers, this is the best value. For other customers, special features are desired, and they are willing to pay for these features. Some phones, like the Motorola s Razor (super thin), and Samsung s PDA phones cause buyers to shell out more money to get what they want. Promotion It is hard to watch TV or look through a magazine without being bombarded with a variety of phones and services. Companies promote their products with celebrities so that consumers associate cool people with a cool product.