Marketing:  all the activities used to insure the effective voluntary exchange of goods/services between businesses and consumers.

Marketing Functions:  groups of marketing activities that must be completed for an exchange to occur.

8 Marketing Functions

• 1.  Product/Service Planning

  • Gather information & test ideas.

  • Design & development.

• 2.  Purchasing

  • Identifies & obtains products/materials or services needed.

• 3.  Financing

  • Ensuring that financing & credit are available.

• 4.  Distribution

  • Getting products to customers.

• 5.  Pricing

  • Set prices and payment methods.

• 6.  Risk Management

  • Security & safety for products & people.

  • Reduces business risks.

• 7.  Marketing Information Management

  • Obtain & organize information to help make marketing decisions.

• 8.  Promotion

  • Communicating with consumers.

  • Encouraging purchases.

Marketing Impact:

• Increases standard of living.

  • Businesses understand our needs & produce goods/services we want.

• Consumers are aware of best products/prices.

• Creates millions of jobs.

Marketing Concept:  considering the consumer in the production & marketing of products & services.

• Successful businesses must:

• 1.  Identify customers & their needs.

• 2.  Develop product that satisfies consumers while completing marketing activities effectively.

• 3.  Make a profit.

Marketing Strategy:  2-step process for successfully planning & marketing products/services.

• 1.  Target market:  clearly identified group of consumers that wants & needs your product.

• 2.  Marketing Mix:  combination of marketing elements designed to meet needs of target market.

  • 4 Ps of the Marketing Mix

  • Product / Place / Price / Promotion

  • Product:  products/services offered to target market to satisfy needs.

  • Examples? Haircut, Banana

  • Place:  locations product sold, and ways made available to customers.

  • Examples? Stores, Catalogs, Tv infomercials.

  • Price:  what customers pay and how they pay.

  • Examples? Cash, check, credit card.

  • Promotion:  methods used to communicate information.

    • Encourages purchases.

    • Increases customer satisfaction

  • Examples? Commercials, print advertisement, contests, coupons.

Product Development: 

• Marketers work with engineers & scientists.

• 1.  Plan new product

• 2.  Develop a model (prototype)

• 3.  Test model product (focus group)

• 4.  Identify likes/dislikes.

• Market researchers survey customers.

  • What they like/dislike about current products.

  • What needs not currently met with available products.

• Once the product is planned:

• 1.  Establish procedures to produce.

• 2.  Secure time/money needed to set-up.

  • Facility, materials, equipment obtained.

  • Employees hired & trained.

Buying Motive:  reasons for making a purchase.

• Rational - Based on facts or logic.

• Example? Buying food because it is good for you.

• Emotional – feeling & attitude

• Example? Buying $400 caviar because you got a promotion.

Products to Consumer

• Channel of Distribution:  path the product travels from producer to consumer.

• Direct channel of distribution: consumer buys direct from producer.

• Indirect channel of distribution:  1+ middlemen or intermediaries.

• Wholesaler vs. retailer

• Wholesaler:  middle firm that assists with distribution activities between businesses.

• Retailer:  business sells direct to consumer.

• Effective Distribution:  adjusts for differences in production & consumption.

• 4 major differences to consider:

• 1.  Differences in quantity:  adjusts between large quantities produced by businesses & small quantities purchased by consumers.

• 2.  Differences in assortment:  adjusts between limited type of products produced by manufacturers and variety of products needed/wanted by consumers.

• 3.  Differences in location:  brings products that are made throughout the world to one location.

• 4.  Differences in time:  allows manufacturer to maximize efficiency in production and delivers products to consumers when needed.

3 goals of Pricing

• 1.  Maximize profits:  increase prices when there is a high demand or limited supply.

• 2.  Increase sales:  lower prices when there is a large supply or strong competition.

• 3.  Maintain an image:  use prices to support an image of quality, service, or value

Promotion

• Marketing tool businesses use to communicate with consumers to persuade them to purchase its products.

• Promotions can also reinforce a consumers purchase decision & remind them of how it meets their needs/wants.

• To be effective:

• 1.  Must be noticed.

• 2.  Encourage consumers to pay attention to message.

• 3.  Consumers must act.

• Media advertising:  reaches many prospective customers.

  • TV, radio, magazines, billboards, newspapers.

• Sales promotions:  intended to attract customers interest or provide a direct incentive for customers to buy

  • Coupons

  • Contests

  • Free samples.

• Publicity:  info about business, product or service, not paid for by the company.

  • News or Press release

  • New product testing results.

    • Consumer reports or car & driver.

• Personal Selling:  direct, personal communication between salesperson & customer.

  • Answer questions or concerns.

  • Encourage to buy.