FBLA Intro to Marketing Concepts

1. Marketing Concept RED - Important for test GREEN - New section or tip

Marketing Concept - Focuses on customer needs and wants to achieve organizational goals. It involves understanding customer preferences, creating products that satisfy those needs, and delivering value to customers to build long-term relationships.

Seven Functions in Marketing

• Product Planning: Involves developing goods and services that meet customer demands.

• Pricing: Determining the right product price to maximize profit and appeal to consumers.

• Promotion: Strategies for creating awareness and persuading customers to buy.

• Selling: Involves direct interaction with customers to facilitate transactions.

• Distribution: Ensuring products reach customers through effective channels.

• Financing: Managing financial aspects related to marketing activities.

• Marketing Information Management: Gathering, analyzing, and using market data to make informed decisions.

Marketing Mix

• Product: The tangible or intangible offering that satisfies customer needs.

• Price: The amount customers are willing to pay for the product.

• Place: The distribution channels through which the product reaches customers.

• Promotion: Strategies to create awareness and persuade customers to buy.

Product Mix Concept

• Product Line Extension: Adding variations to existing product lines.

• Product Line Contraction: Reducing the number of products in a line.

• Brand Extension: Introducing new products under an existing brand.

Importance of Branding, Packaging, and Labeling

• Branding: Establishing a unique identity for a product or service.

• Packaging: Protecting and presenting the product attractively.

• Labeling: Providing information about the product, including ingredients and usage instructions.

Factors in Product/Business Positioning

• Features/Benefits: Highlighting unique attributes and advantages.

• Price/Quality: Positioning based on pricing and perceived quality.

• Competition: Identifying and emphasizing advantages over competitors.

Factors Influencing Product Price

• Cost: Covering production and operational expenses.

• Quality: Reflecting the product's perceived value.

• Competition: Considering market pricing dynamics.

• Brand Loyalty: The strength of customer allegiance to the brand.

2. Purpose and Importance of Selling

• Purpose: Selling is the process of persuading and influencing potential customers to make a purchase. It involves conveying the value of a product or service to meet the customer's needs.

• Importance: Selling is crucial for revenue generation, business growth, and building customer relationships. It establishes a direct link between the product and the customer, creating a pathway for transactions and customer satisfaction.

Concepts and Techniques in Selling

• Needs Assessment: Understanding customer needs to tailor the sales pitch.

• Features and Benefits: Highlighting product features and how they benefit the customer.

• Objection Handling: Addressing customer concerns and overcoming objections.

• Closing Techniques: Methods to secure a commitment from the customer.

• Follow-up: Post-sale activities to ensure customer satisfaction.

Steps in the Selling Process

1. Prospecting: Identifying potential customers.

2. Approaching: Initiating contact with the customer.

3. Presentation: Communicating product features and benefits.

4. Handling Objections: Addressing customer concerns.

5. Closing: Securing the sale commitment.

6. Follow-up: Ensuring customer satisfaction post-sale.

Factors Influencing Customer Buying Motives and Decisions

• Emotions: Personal feelings and attachments.

• Perception: How customers perceive a product.

• Social Influences: Opinions and recommendations from friends, family, or peers.

• Economic Factors: Affordability and financial considerations.

Completing the Sales Transaction

• Method of Payment: Accepting various payment methods securely.

• Counting Back Change: Ensuring accuracy in providing change.

• Folding, Wrapping, and Bagging: Presenting merchandise professionally.

• Thanking Customers and Inviting Them to Return: Creating a positive impression and encouraging repeat business.

Handling Customer Inquiries, Complaints, or Difficult Situations

• Active Listening: Paying attention to customer concerns.

• Empathy: Understanding and acknowledging customer feelings.

• Problem Resolution: Finding solutions to address customer issues.

• Effective Communication: Clearly and courteously conveying information.

3. Role of Promotion as a Marketing Function

• Promotion: Promotion is a key marketing function aimed at enhancing product visibility, stimulating demand, and ultimately driving sales. It involves various activities to communicate the value of a product or service to the target audience.

• Major Purpose of Advertising: The primary purpose of advertising is to create awareness, generate interest, and persuade target customers to take specific actions, such as making a purchase or trying a product/service.

Advantages and Disadvantages of Advertising and Promotional Media

• Radio

  • Advantages: Wide reach, cost-effective.

  • Disadvantages: Lack of visual appeal.

• Television

  • Advantages: High visual impact, broad audience.

  • Disadvantages: Expensive production, short exposure time.

• Direct Mail

  • Advantages: Targeted, personalized.

  • Disadvantages: High cost, potential for being perceived as junk mail.

• Outdoor

  • Advantages: High visibility, constant exposure.

  • Disadvantages: Limited message space, dependency on location.

• Newspaper

  • Advantages: Local reach, timely.

  • Disadvantages: Declining readership, limited visual appeal.

Concept of Promotional Mix and Elements

• Promotional Mix: The combination of promotional elements used to achieve marketing goals.

Elements

• Advertising: Paid, non-personal communication through various media.

• Publicity: Unpaid, non-personal communication through media coverage.

• Sales Promotion: Short-term incentives to encourage product purchase.

• Personal Selling: Direct, face-to-face communication with potential customers.

Visual Merchandising, Display, and Trade Shows

• Visual Merchandising: The use of visual elements to enhance the presentation and appeal of products in a retail setting.

• Display: Presenting products in an aesthetically pleasing manner to attract customer attention and drive sales.

• Trade Shows: Events where businesses showcase their products or services to a targeted audience, fostering networking and business opportunities.

4. Reasons for Conducting Market Research

• Understanding Customer Needs: Identify and understand the needs and preferences of the target market.

• Competitor Analysis: Analyze the strengths and weaknesses of competitors in the market.

• Market Trends: Stay updated on current market trends and consumer behavior.

• Product Development: Gather insights for developing new products or improving existing ones.

• Risk Mitigation: Reduce business risks by making informed decisions based on market data.

Marketing Research Methods and Procedures

Methods

• Surveys: Collecting data through structured questionnaires.

• Interviews: Gathering information through direct conversations.

• Observations: Systematic recording of behaviors or events.

Procedures

• Define the Problem: Clearly articulate the research objectives.

• Design Research Plan: Develop a systematic approach for data collection.

• Data Collection: Execute the research plan using chosen methods.

• Data Analysis: Interpret and draw conclusions from collected data.

• Report Findings: Communicate results to stakeholders.

Sources of Primary and Secondary Data

• Primary Data: Collected firsthand for specific research objectives.

• Secondary Data: Existing data gathered for purposes other than the current research.

Ways to Obtain Market Data

• Surveys: Questionnaires to gather opinions and preferences.

• Interviews: Direct conversations to gain in-depth insights.

• Observations: Systematic recording of consumer behavior.

Concept of Target Markets and Market Segmentation

• Target Markets: Specific groups of potential customers that a business aims to reach.

  Market Segmentation

• Demographics: Dividing the market based on age, gender, income, etc.

• Psychographics: Segmenting based on lifestyle, values, and interests.

• Geographic: Dividing by location, region, or climate.

Importance of Marketing Plan and Components

Marketing Plan: A comprehensive document outlining marketing strategies and objectives.

Components

• Executive Summary: Overview of the plan.

• Market Analysis: Evaluation of market conditions.

• Marketing Strategies: Planned actions to achieve objectives.

• Implementation Plan: Detailed steps for execution.

• Budget and Controls: Financial aspects and monitoring mechanisms.

5. Channels of Distribution (know everything in this section it is vital for the test)

• Channels of Distribution: The pathways through which products or services reach the end consumer.

• Direct Distribution: Selling directly to consumers.

• Indirect Distribution: Involves intermediaries like wholesalers and retailers.

Direct and Indirect Channels of Distribution

Direct Channels

• Producer to Consumer (Direct Marketing): Direct sale to consumers, bypassing intermediaries.

• Producer to Retailer to Consumer: Manufacturer sells to retailers who then sell to consumers.

Indirect Channels

• Producer to Wholesaler to Retailer to Consumer: Involves intermediaries such as wholesalers and retailers.

• Producer to Agent/Broker to Retailer to Consumer: Agents/brokers facilitate transactions between producers and retailers.

Transportation Systems and Services

• Motor Transportation: Trucks and vehicles for land transport.

• Rail Transportation: Trains for moving goods over long distances.

• Water Transportation: Ships and vessels for transporting goods over water.

• Air Transportation: Airplanes for fast and long-distance deliveries.

Storing and Warehousing Options

Storing Options

• Cold Storage: Used for perishable goods requiring low temperatures.

• Commodity Storage: Suitable for non-perishable goods like grains or raw materials.

• Bulk Storage: Ideal for large quantities of goods without individual packaging.

Warehousing Options

• Distribution Centers: Facilities for efficient movement and distribution of goods.

• Public Warehousing: Shared storage space for multiple businesses.

• Private Warehousing: Exclusive storage space dedicated to a single business.

Procedures to Store Merchandise Until Needed

• Inventory Management: Tracking and managing stock levels efficiently.

• Security Measures: Implementing measures to prevent theft or damage.

• Order Picking and Packing: Preparing goods for shipment based on customer orders.

• Quality Control: Ensuring stored goods remain in good condition.

4. Impact of Technology, Including the Internet, on Marketing

Ways Technology Impacts Marketing

• Increased Connectivity: Technology facilitates instant communication and connectivity with a global audience.

• Data Analytics: Enables businesses to gather and analyze consumer data for targeted marketing strategies.

• E-commerce Platforms: Provides new avenues for buying and selling, expanding market reach.

Social Media Influence: Social platforms serve as powerful tools for marketing, brand building, and customer engagement.

Impact of the Internet on Marketing

• Global Reach: The Internet allows businesses to reach a vast global audience.

• Targeted Marketing: Precise targeting of specific demographics and consumer segments.

• Cost-Effective: Digital marketing can be more cost-effective compared to traditional methods.

• Real-Time Communication: Instant interaction with customers for feedback, promotions, and updates.

Considerations in Website Pricing

• Product Value: Pricing should reflect the perceived value of the product or service.

• Competitive Analysis: Consider pricing strategies of competitors in the online market.

• Costs and Margins: Factor in production costs, overheads, and desired profit margins.

• Perceived Value: Align pricing with the perceived value by the target audience.

• Discounts and Promotions: Incorporate promotional strategies to attract and retain customers.

Using a Website Presence to Promote a Business or Product

• Online Visibility: Ensure the website is easily discoverable through search engines.

• Content Marketing: Use engaging content to inform and attract visitors.

• Social Media Integration: Leverage social platforms to share content, promotions, and engage with the audience.

• E-commerce Functionality: Enable easy and secure online transactions.

• Customer Reviews and Testimonials: Showcase positive feedback to build trust.

• Mobile Optimization: Ensure the website is accessible and user-friendly on mobile devices.

• Email Marketing: Utilize email campaigns for promotions, newsletters, and customer communication.

5. Concept of Competition and its Impact on Marketing

• Competition: The rivalry between businesses for market share, customers, and resources.

  Ways Competition Affects Marketing Decisions

• Price Competition: Businesses may adjust prices to gain a competitive edge.

• Product Differentiation: Focus on unique features to stand out.

• Marketing Strategies: Innovate strategies to attract and retain customers.

• Market Research: Constantly analyze competitors for informed decision-making.

• Customer Focus: Strive to meet customer needs better than competitors.

Concept of Profit in Private Enterprise and Factors Affecting Profit

• Profit: The financial gain a business achieves after deducting expenses from revenue.

  Factors Affecting Profit

• Economic Factors: Market conditions, inflation, and economic trends.

• Human Factors: Workforce efficiency, skills, and management decisions.

• Nature Factors: Natural disasters, climate changes, and environmental impacts.
  

Concept of Economic Resources

• Economic Resources: The inputs used in the production of goods and services.

  Types

• Land: Natural resources used in production.

• Labor: Human effort and skills.

• Capital: Goods and machinery used for production.

• Entrepreneurship: Innovation and risk-taking in business.

Principles of Supply and Demand

• Supply: The quantity of a good or service a producer is willing to offer at a given price.

• Demand: The quantity of a good or service consumers are willing to buy at a given price.

  Principles

• Law of Supply: Producers supply more at higher prices.

• Law of Demand: Consumers buy more at lower prices.

• Equilibrium: Price where supply equals demand.

Types of Economic Systems

• Capitalism

  • a. Private ownership of resources and businesses.

  • b. Market-driven with limited government intervention.

• Socialism

  • a. Collective or government ownership of resources.

  • b. Greater government intervention in economic planning.

• Communism

  • a. Complete government ownership and control of resources.

  • b. No private ownership, classless society.

6. Ethical Issues and Impact on Marketing

Ethical Issues in Marketing

• Deceptive Advertising: Providing misleading information about products.

• Price Gouging: Unfairly increasing prices during times of crisis.

• Unfair Competition: Engaging in practices that undermine competitors unfairly.

• Privacy Concerns: Mishandling or misusing customer data.

Impact on Marketing

• Loss of Trust: Ethical violations can erode consumer trust.

• Reputation Damage: Negative publicity can harm a company's reputation.

• Legal Consequences: Ethical breaches may lead to legal actions.

Influence of Special Interest Groups and Changing Cultural Characteristics on Marketing

Special Interest Groups

• Government Pressure: Regulatory actions influencing marketing practices.

• Labor Groups: Advocacy for fair labor practices impacting marketing strategies.

Changing Cultural Characteristics

• Aging Population: Shifts in target demographics and product preferences.

• Single-Person Households: Altered consumer behaviors and purchasing patterns.

• Mobility: Increased focus on mobile-friendly marketing strategies.

Social Responsibility of Marketing in Society

• Social Responsibility

  • a. Environmental Issues: Sustainable and eco-friendly business practices.

  • b. Ethical Decisions: Making moral choices in marketing strategies.

  • c. Community Involvement: Contributing to the well-being of local communities.

Importance

• a. Positive Image: Demonstrates a commitment to social values.

• b. Long-Term Success: Builds goodwill and enhances brand reputation.

• c. Consumer Loyalty: Ethical and socially responsible practices resonate with consumers.

Copyright, Trademark, Patent

• Copyright: Protects original works of authorship like books or music.

• Trademark: Protects symbols, names, or slogans identifying goods/services.

• Patent: Protects inventions or discoveries, granting exclusive rights.

Antitrust laws

• Antitrust laws - regulations that promote fair competition by preventing monopolies, price-fixing, and other anti-competitive practices. They aim to protect consumers and ensure a level playing field in the market.

SWOT analysis

Strength

Weaknesses

Opportunity

Threats

AIDA Model

Attention

Interest

Desire

Action

Product life cycle

development,

introduction,

growth,

maturity,

decline