Marketing Principles Chapter 1 Test notes

Goods and Services Marketing Notes

Definition of Marketing

• Marketing: Activity, set of instructions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society.

Goods vs. Services

• Goods: Tangible items with monetary value that satisfy needs (e.g., clothing, electronics).

• Services: Intangible items with monetary value that satisfy needs and wants (e.g., haircuts, consulting).

Seven Marketing Core Functions

1. Channel Management:

   • Process of getting goods to customers.

   • Involves shipment and delivery methods:

     • Truck

     • Rail

     • Ship

     • Air

     • Drones:

       • Positive: Quicker delivery, no traffic.

       • Negative: Weather can delay delivery.

2. Marketing Information Management (MIM):

   • Research and data gathering about customer habits, attitudes, and market trends.

3. Market Planning:

   • Developing and targeting specific marketing strategies for a select audience.

   • Closely related to MIM.

4. Target Audience:

   • Specific group identified based on needs and wants (e.g., age group).

5. Pricing:

   • Decisions on how much to charge for goods/services to ensure profit.

   • Profit: Money made after expenses.

   • Pricing influenced by costs and competitor pricing.

   • Example: Food truck pricing (e.g., Kona Ice).

6. Product Service Management:

   • Obtaining, developing, and maintaining products.

   • Example: iPhone 16 features (memory, cameras, accessories).

7. Promotion:

   • Efforts to inform, persuade, or remind customers about products/services.

   • Examples:

     • Television

     • Radio

     • Social Media (Facebook)

     • Billboards

     • Flyers

     • Word of Mouth (e.g., local restaurants).

8. Selling:

   • Providing customers with desired goods/services.

   • Influences purchasing decisions and future business opportunities.

   • Salesperson Salary Range: $55,000 - $100,000+ (varies by industry).

   • Perks: Travel, expense accounts, company vehicles.

Business Structures and Marketing Concepts

Corporation

• Definition: A legal entity created by individuals (stockholders/shareholders) to operate for profit.

• Capabilities:

  • Enter into contracts

  • Sue and be sued

  • Own assets

  • Remit federal and state taxes

  • Borrow money from financial institutions

Non-Profit Corporations

• Definition: Legal entities incorporated for purposes other than generating profits for owners or shareholders.

Partnership

• Definition: A legal relationship formed by a written agreement between two or more individuals or companies.

• Characteristics:

  • Partners invest money in the business.

  • Profits and losses are shared among partners.

Sole Proprietorship

• Definition: The simplest business form where one person owns the business and is personally responsible for its debts.

• Naming: Can operate under the owner's name or a fictitious name.

The Market Concept

• Definition: The idea that businesses should satisfy customer needs and wants while generating profits.

• Example: The Pompeian Olive Company.

Economic Benefits of Marketing

• Value Addition: Marketing functions add value to products, known as utility.

• Five Types of Economic Utilities:

  1. Form Utility: Transforming raw materials into usable goods.

     • Examples:

       • Rubber → Tires, watch bands

       • Plastics → Water bottles, containers

       • Tobacco → Chew, cigarettes

  2. Time Utility: Availability of products/services at specific times.

     • Examples:

       • Seasonal products (salt, shovels in winter)

       • Seasonal coffee flavors (eggnog, peppermint)

       • Businesses open at convenient hours (banks, gas stations)

  3. Place Utility: Ensuring products are available where customers can buy them.

     • Example: Dollar General in Penn Township studies consumer shopping habits.

Summary

Understanding different business structures (corporations, non-profits, partnerships, sole proprietorships) is essential for navigating the business landscape. Additionally, the market concept and economic utilities highlight the importance of marketing in adding value to products and meeting customer needs.