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Functions of Marketing
distribution, financing, marketing information management, pricing, product/service management, promotion, selling
Distribution
Process of getting goods to customers
Includes purchasing, stock handling, inventory control, and physical distribution
Involves tracking products
Marketing Information Management
gathering and analyzing information about consumers, trends, and competitors' products
requires good research and development
focus groups - listening to what consumers say about your products
Product/Service Management
Obtaining, developing, maintaining, and improving a product or a product mix in response to market opportunities
Financing
Getting necessary money to set up and run business
Includes protecting investment through risk management
Selling
providing customers with the goods and services they choose to buy
relationship marketing: build and maintain relationships with customers
Marketing Mix
Product, Price, Place, Promotion
channel of distribution
a pathway to direct products to consumers
Promotion
Any effort to inform, persuade or remind potential customers about a business' products or services
Direct Distribution
goods or services are sold from the producer directly to the customer
Indirect Distribution
involves one or more intermediaries
break-even point
the point at which the costs of producing a product equal the revenue made from selling the product
marketing concept
determining wants and needs of customers
Target Marketing
helps companies focus on the people most likely to buy their goods or services.
market research
the gathering and analysis of information on the size, location, and makeup of a product market
Market Segmentation
the division of a market for a product into groups of customers who have the same needs and traits
Steps in Product Development
Generate Ideas - Brainstorm
Screen Ideas - Evaluate
Develop a Business Plan - Written Proposal
Develop the Product - Prototype
Test Market the Product - Collect customer feedback
Introduce the Product - Put it on the market
Evaluate Customer Acceptance - Assess
Why companies advertise?
Advertising is the public promotion of something such as a product, service, business, or event, to attract or increase interest within it
Types of Media
Newspapers Magazines Television Direct Mail Advertising Directory Advertising Radio Advertising Online Media Other Types of Media
media planning
the process of selecting the best mediums to use to reach the intended target audience
advertising agency
a business that specializes in developing advertising campaigns
ad campaign
a series of ad messages that share a single idea and theme
media measurement
Deals with how to measure an ads effectiveness
Audience - a number of people exposed to an ad Impression - a single exposure to an ad Frequency - number of times the audience see/hears an ad Cost per Thousand (CPM) - media cost per exposure 1,000 people to an ad
Motivation
Inspiration
Initiative
Ability to act and make decisions without the help of others
Goal
Confidence
Self-confident
Decisive
Communication
Good Human Relations
Conflict Resolution
Mentor
Good Listeners
Integrity
Adherence to a code of ethical values
Most highly valued quality in a leader
autocratic leadership
one person runs everything and makes all decisions
gives orders and expects them to be obeyed
firefighters, combat troops, police officers
democratic leadership
work with employees to make decisions
new ideas are encouraged
democratic leaders still make final decisions but may explain reasoning
free-rein leadership
Requires leader to set goals and leave staff to do job
Trust placed on employees
Hands Off Approach
Delegation
Why Delegate?
-Managers don't have time to do everything
-Managers can focus on more important work
-Employees have more ownership of the production process
-Employees have a chance to develop their own potential
leadership qualities
motivation, inspire, confidence, communication, integrity
Three levels of government
federal, state, local
interstate commerce
trade between states
intrastate commerce
commerce conducted wholly within one state
Protecting Competition
-antitrust laws allows the federal government to break up monopolies, regulate them, or take control
Monopoly
When company controls industruy or the only one to offer a product
Oligopoly
When small number of companies control a given industry
Current Day Excample of Oligopoly
90% of the U.S. media outlets are owned by six corporations: Disney, CBS, NBC (To name a few)
antitrust laws
allows government to break up monopolies, regulate them, or take control
Copyright
Legal right to own creations
Protects photographs, music, painting, books, plays, and other written material
Lasts 70 years after death
Patent
Legal grant for sole right to own invention
Granted by federal government
No one can use without permission for over 20 years after application with U.S. patent and trademark office
Trademark
Symbol or characteristic identifying product
Government's Role in Society
Provides key services to public
Public goods and services
Parks, Libraries, Defense
Paid for by taxes
Gives business incentives
Revenue
Income the government gets from sources
Contract
A legally enforceable agreement (Written, verbal, handshake)
Breach of Contract
Party fails to live up to terms of contract
Easier to prove if written
Privatization
Business offers public good or service and government pays for it
Ex: Cafe in Govt. Building
Public goods and services
Parks, libararies, defense (paid for by taxes)
transfer payments
Benefits at the government's expense:
Social Security
Unemployment
Veteran's Benefits
Providing Employment
More than 3 million people work for the federal government, state & local governments
Ex: President, Firefighters, Mayor
consuming goods and services (largest)
government (the government buys tools directly from companies that make equipment specially to occupy schools, military personnel, offices, and blue-collar jobs)
Small Business Administration (SBA)
U.S. government agency that encourages small businesses
Subsidies
Financial support from the government
tax
Some goods have taxes built into price such as gasoline
Income tax comes right out of your paycheck
Each level of government collects taxes
tax incentive
temporary reduction or elimination of tax to encourage or discourage activity
Purpose of money
Money allows people and businesses to buy and sell goods around the world (coins, currency, checks, and debit cards)
monetary system
Today we use coins, currency, checks, and debit cards
Functions of Money
medium of exchange
standard of value
store of value
Characteristics of money
Must be stable in value
Must be relatively scarce
Must be accepted for goods and services
Should be divisible into parts
Has to be portable and durable
Hard to counterfeit
Financial Institution
a firm that manages money
Storing Money
to place or leave money for preservation or later use
bank account used for recording the amount of money that has been deposited or withdrawn
Bank account
a record of the amount of money a customer has deposited into or withdrawn from a bank
checking account
Short term storage
Banks charge a fee
savings account
Long term storage
Earns more interest
deposit
to put money into an account
withdrawal
to take money out of an account
interest
a rate that the bank pays customers for keeping their money
transferring money
banks use checks and electronic fund transfers to move money
EFT
allows money to transfer from one bank to another through a network
Direct Deposit
electronic transfer of a payment directly from the payer's bank account to that of the party being paid
lending money
The primary way banks generate profits
Most banks require collateral
collateral
property or goods pledged by a borrower to use as security against a loan if it is not repaid
mortgage
a specific type of loan that is used to buy real estate
safe deposit box
a secure box in a bank's vault used for the safe storage of a customer's valuables
Financial Institutions
Banks operate on state, national, and international levels
There are strict rules to start a bank
The owner must apply for a charter from the government
(Commercial banks, Savings and Loan Associates, Credit Union)
commercial bank
Majority of banks in the United States
Full service banks
Authorized to conduct business through a charter, or license issued by state or federal government
Products: checking, savings, loans, debit cards
Services: commercial lending, trust services, asset management, cash management, financial services
savings and loan associations
financial institutions that hold customers' funds in interest-bearing accounts and invest mainly in mortgage loans
functions similar to a credit union or retail bank but does not offer the full range of services - lending is geared towards residential mortgages
Credit Union
not-for-profit banks/cooperatives set up by organizations for their customers to use
operated for the benefits of its members
offers credit cards, checking accounts, low-interest loans, high-interest savings accounts
mortgage companies
provide loans for buying a home or business
finance companies
short-term loans to businesses and consumers
insurance companies
provide protection against problems and also offer loans to businesses
brokerage firms
sell stocks and bonds and also offer a wide range of financial services
asset management firms
provide investors with more diversified invest and sophisticated options including management services
investment banks
financial consultants that specialize in large and complex financial transactions
Glass-Steagall Act of 1933
separated commercial banking from investment banking
Federal Reserve
The central bank of the United States
Woodrow Wilson signed the Federal Reserve Act on 12/23/1913 12 Federal Reserve Districts, 25 Branch Banks, 5,000 member banks
Management
Helps businesses focus on setting and meeting goals efficiently and effectively so that profit can be made
Four Functions of Management
planning, organizing, leading, controlling
Planning
creates a detailed plan aimed at an organization's goal
Organizing
getting resources arranged in a practical way to accomplish goals & objectives
leading
Delegate work, oversee time management, and provide feedback while inspiring others with a vision.
controlling
A manager monitoring the progress towards achievement of the company's goal. In summary, they ensure goals are met.
Levels of Management
top managers, middle managers, front-line managers
Top-level managers
managers responsible for setting goals and planning the future for a company.
Middle Managers
responsible for setting objectives consistent with top management's goals and for planning and implementing subunit strategies for achieving these objectives.
frontline managers
Lower-level managers who execute the operational activities of the organization.
Management Structures
Line Authority
Line and Staff Authority
Centralized Organization
Decentralized Organization
line authority
Managers on one level are responsible for those beneath them. Common in small companies
line and staff authority
shows direct line of authority
Used for middle and large size companies
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