Marketing Essentials

The Basics of Marketing

• To market a product successfully, a company has to understand what people want to buy and why they want to buy it.

• It all comes down to knowing your market.

• From a marketing viewpoint, a market is a group of customers who share common wants and needs.

• Marketing is the process of creating, promoting, and presenting a product or service to meet the wants and needs of consumers, wherever they are.

  • Marketing involves a number of stages, from studying what people want to buy to designing a product’s packaging.

The Functions of Marketing

• There are seven functions of marketing.

  • Distribution is the process of getting goods and services to customers.

  • Financing is getting the money that is necessary for setting up and running a business.

  • Marketing information management is gathering and analyzing information about consumers, trends, and competitors’ products.

  • Pricing is deciding how much to charge for a product or service so the business can make a profit.

  • Product/service management is obtaining, developing, maintaining, and improving a product or product mix in response to market opportunities.

  • Promotion is any effort to inform, persuade, or remind potential customers about a business’s products or services.

  • Selling is providing customers with the goods and services they choose to buy.

• A popular trend today is using relationship marketing.

• Companies use relationship marketing to build and maintain relationships with their customers.

The Marketing Mix

• The marketing mix consists of four basic marketing strategies: product, place, price, and promotion, collectively known as the four Ps.

• In recent years, many people have begun to include a fifth P for people because the success of a marketing mix depends on people: good employees and customers.

• First, marketing is used to find out if there is a demand for a product.

  • Marketers have to decide how and where customers will buy their goods and services

• To make place decisions, marketers select the right channel of distribution.

  • A channel of distribution is a pathway to direct products to consumers.

  • Direct distribution occurs when goods or services are sold from the producer directly to the customer.

  • Indirect distribution involves one or more intermediaries.

• To determine the price of a product, a marketer considers three questions:

  • (1) How much are customers willing to pay?

  • (2) Is the price competitive with other products? and

  • (3) Can the company make a profit?

• Marketers must find the break-even point.

  • The break-even point is the point at which total revenues, or sales, equal total costs and expenses of developing and offering a product or service.

• Promotion involves making customers aware of a product.

• The most familiar form of promotion is advertising

Market Research and Product Development

Market Research

• Market research is the gathering and analysis of information on the size, location, and makeup of a market.

  • Market research helps companies to produce and market products and services that attract customers.

• This is known as the marketing concept.

  • The marketing concept involves determining the wants and needs of customers and providing them more efficiently and effectively than competitors.

• Demographics are facts about the population

• Target marketing helps companies focus on the people most likely to buy their goods or services.

• Market segmentation is the division of a market for a product into groups of customers who have the same needs and traits.

1. Generate ideas

2. Screen ideas

3. Develop a business plan

4. Develop the product

   • A prototype is a model of the actual product

5. Test-market the product

   • To test-market a product means to offer it in a limited market for a limited time

6. Introduce the product

7. Evaluate customer acceptance