Basics Of MarketingMARKET: a group of customers who share commonwants and needs • Can be individuals or a country as a wholeMARKETING: process of creating, promoting, andpresenting a product or service to meet the wants andneeds of consumers Marketing different products requires different strategies!
Functions of Marketing (7)1. DISTRIBUTION: the process of getting goods and services to customers • Purchasing, stock handling, inventory control, and physical distribution2. FINANCING: getting the money that is necessary for setting up and running a business3. MARKETING INFORMATION MANAGEMENT: gathering and analyzing information about consumers, trends, and competitors’ products
Functions (Continued)4. PRICING: Deciding how much to charge for a product/service.5. PRODUCT/SERVICE MANAGEMENT: obtaining, developing, maintaining, and improving a product in response to market opportunities.6. PROMOTION: effort to inform, persuade, or remind potential customers about a business’s products or services.7. SELLING: providing customers with the goods/services they choose to buy.
The Marketing Mix – the 4 P’sMARKETING MIX- the 4 basic marketing strategies1. PRODUCT: a) Is there a demand for a product? b) How can I make the product appeal to customers (packaging)? Do you think the SNICKERS® packaging What holiday(s) do you think the is appealing? Why or why not? demand for SNICKERS® might increase?
The Marketing Mix (continued)2. PLACE: a) How will customers buy their product? b) Where will customers buy the product/service?CHANNEL OF DISTRIBUTION: pathway to direct products to consumers 2 TYPESDIRECT DISTRIBUTION: sold INDIRECT DISTRIBUTION:from producer directly to customers one or more intermediaries (distributors, wholesalers, or retailers)Example: farmer to YOU! Example: farmer to HyVee to YOU! Are SNICKERS® sold directly or indirectly?
Marketing Mix (Continued)3. PRICE: a) What are customers willing to pay? b) Is the price competitive with other products? c) Can the company make a profit?BREAK-EVEN POINT: point at which…total revenue/sales =the total costs/expenses of developingand offering the product/service
Marketing Mix (Continued)4. PROMOTION: a) How will customers be aware of a product? • Advertising, discounts/coupons, rebates, sales, give away items Where does SNICKERS® advertise?
Marketing Mix (Continued)5. 5th New Element: PEOPLE: Good employees and customers
Market ResearchMARKET RESEARCH: gathering and analysis of information onthe size, location, and makeup of a market. • Market research helps businesses discover consumers’ wants & needs!DEMOGRAPHICS: facts about the population • Age • Gender What are your demographics? • Location • Income
Market ResearchTARGET MARKETING: focus on the people most likely to buythe products/services Example: Gatorade’s target market is active youth What is SNICKERS®’ target market?
Market ResearchMARKET SEGMENTATION: division of a market for a productinto groups of customers who have the same needs and traits Example: a product that generally is marketed to adult males (let’s say men’s deodorant) might be presented differently on the country music channel than it would be on a sports channel
Product Development (7 Steps)1. GENERATE IDEAS: • Product development/market research2. SCREEN IDEAS: • Does the product fit the company? • Does it compete with existing company products?3. DEVELOP A BUSINESS PLAN: • Written proposal that includes estimated sales, costs, profit potential, market trends, and competing products
Product Development (continued)4. DEVELOP THE PRODUCT: • Prototype: model of the actual product - tests how it can be made, if changes need to be made5. TEST-MARKET THE PRODUCT: • Offer in a limited market for a limited time • Collect customer responses if they like the product • Disadvantage: competitor can have time to develop similar product!6. INTRODUCE THE PRODUCT: • Publicity campaign to introduce product • Launch of new product cost can be high
Product Development (continued)7. EVALUATE CUSTOMER ACCEPTANCE: • Track customer responses to product • What new products are they buying? PRODUCT FAILURES: not all products succeed!