Basics of Marketing A market is a group of customers who share common wants and needs, and who have the ability to purchase a particular product.
Figure 13.1 U.S GAME CONSOLE MARKET Fun and Games. A market can be described as the people who are potential customers of a product, as well as by the classification of a product in a category. Which company that makes game consoles interests you most? What does the company do to grab your attention?
Basics of Marketing Marketing is the process of creating, promoting, and presenting a product to meet the wants and needs of consumers.
Basics of Marketing Businesses want you to buy their product so they perform detailed research on markets to find and analyze potential customers in their market. This is called target marketing.
Functions of Marketing The seven functions of marketing are:
Involves moving goods and services from one place to the end user (trucks, trains, airplanes and ships)
Money is necessary for business; businesses decide if customers can pay with credit or other payment options
Marketing information management
Making an informed decision requires good research and development (market research)
Marketers must figure out what price to charge for a product so the company makes a profit.
Need to consider the impact of distribution, because each time a product goes through another channel of distribution, the price goes up (later on in the chapter)
Product/service management By obtaining information, developing and maintaining products, marketers decide how to respond to market opportunities Promotion Communication through any type of media gets a business’s product out and into the hands of the public
Retailers or the business-to-business market provides customers or industrial users with goods and services
A popular trend in today’s marketing world is relationship marketing. Companies use this strategy to build customer relations.
Marketing Mix The four elements of marketing—product, place, price, and promotion—are called the marketing mix, or the four Ps .
Product Marketing is used first to find out if there is a demand for a product. Then it is concerned with how to present a product to the customer to make it as appealing as possible.
Place One of the first things marketers have to consider is where to sell a product. Then marketers have to consider in what kind of location to sell their product.
Place The placement of the product in a store is important.
Price To determine the price of a product a marketer considers three questions:
How much are customers willing to pay?
Is the price competitive with other products?
Can the company make a profit?
Price The break-even point is the amount of money a company has to make on a product to pay for its costs.
Promotion Promotion consists of making customers aware of a product. The most familiar form of promotion is advertising.
Promotion Some marketers offer discounts in the form of coupons, rebates, and sales. Another way companies promote their products is through public relations, or publicity .
Market Research Companies do market research to gather and study information about consumers to determine what kinds of goods and services to produce.
Market Research Demographics are facts about the population in terms of age, gender, location, income, and education. Once marketers know the demo-graphics of a market, they can develop products for it.
Product Development A company’s ability to create a new product or a slight variation of an already successful one is important to increasing sales.
Product Development The seven steps for developing a new product are:
Developing a business proposal
Developing the product
Test marketing the product
Introducing the product
Evaluating customer acceptance
Figure 13.2 MARKETING RESEARCH REVENUES BY INDUSTRY GROUPS Client industry groups for marketing research spend over $3 billion annually. Why does the government spend money on marketing research?
Channels of Distribution A channel of distribution is a particular way to direct products to consumers.
Channels of Distribution Direct distribution occurs when the goods or services are sold from the producer directly to the customer.
Channels of Distribution Indirect distribution involves one or more intermediaries.
Channels of Distribution The biggest impact distribution has on marketing is how it affects the price of products. Each time a product goes through another channel of distribution, the cost of marketing increases.
Channel Members Moving the product from manufacturer to the final user is an intermediary, or a go-between. Intermediaries include distributors, wholesalers, retailers, and even the Internet.
Channel Members A distributor represents a single manufacturer in a geographic area.
Channel Members A wholesaler receives large shipments of products from many different producers. Wholesalers break the shipments into smaller batches for resale.
Channel Members A retailer sells goods directly to the customer. This is the final stop in the channel of distribution.