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Marketing and the Marketing Concept
Marketing & the Marketing Concept What is Marketing?
The process of planning, pricing, promoting, selling, & distributing ideas, goods, and services to create exchanges that satisfy customers. Ongoing Always changing
Must be able to keep up with the latest trends & consumer attitudes.
What was cool in my day is not cool today
The First Laptop In 1981, the first laptop was created
Osborne 1 Weighed 24 pounds Cost $1,795 5” screen 2 Floppy Disk Drives
Cool In My Day…..Not Cool In Yours
Clothes: Baggy & Bright
Shoes: “Chunky” Soles
Doc Marten’s Vans/Airwalks
Cool In My Day…..Not Cool In Yours
Video Games:
Sega, Nintendo Gameboy & Nintendo 64
Fun Hobbies:Laser Tag, Paintballs, Rollerblading, Cosmic Bowling
Collectables:Beanie Babies, Precious Moments, Coca-Cola Bears
Phrases: “As If” “Whatever….” “I’d tell you, but then I’d have to kill you” 24/7
Cool In My Day…..Not Cool In Yours
What was once cool for you…. Clothes: Hoodies, camouflage, popped collars, daisy
dukes
Shoes: Cowboy Boots, Crocs, Uggs (boots)
Collectables: Bratz Dolls, gel bracelets
Phrases: “That’s Hot” (Paris Hilton), OMG!
Music: Blink 182, Sum 41, Lit, DMX
What is cool right now, but for how long… Skinny Jeans Energy Drinks (Red Bull/Monster/Rock Star) Ring Tones Hybrid Cars P2P File Sharing – (Limewire, Kaaza, Napster) MySpace YouTube Tivo Nintendo Wii Phrase: “B.A.”
What’s on the Horizon Twitter/Facebook/Social Networking Vampire Movies/TV Shows http://www.trendhunter.com/
Slim Chips: Calorie-Free Paper Airbrushing tattoo’s Glowing Swings
Marketing Bottom-line Marketing is a process and is always changing
MySpace, Facebook, Twitter, Text Messaging
The products, ideas, & services you develop and the way you price, promote, and distribute them should reflect the newest and most popular trends.
All functions of marketing must promote this effort
Ideas, Goods, & Services Ideas: Promoting thoughts/platform
Politicians promoting their agenda Al Gore & Global Warming John McCain & offshore oil drilling (Anwar)
Goods: Tangible items w/ monetary value & satisfy needs Products you can hold or touch
Cars Toys Furniture
Services: Intangible items w/ monetary value & ability to satisfy needs You cannot physically touch them Usually involve a task
Hair Cut Medical Appointment Amusement Park
Foundations of Marketing There are four basic foundations of
Marketing:1. Business, management, entrepreneurship2. Communication & interpersonal skills3. Economics4. Professional Development
In order to be successful in Marketing you must value and understand the role these four foundations have.
Marketing & the Marketing Concept
Marketing
Seven FUNctions of Marketing1. Distribution
2. Financing
3. Marketing Information Management
4. Pricing
5. Product/Service Management
6. Promotion
7. Selling
Seven FUNctions of Marketing Distribution – How are you going to get the product to the customer?
Moving/Transporting product Storing Tracking product
Financing –How are you going to get the money to setup & run your business?
Sell stock Offer credit to customers
Mastercard/Visa JCPenny/Kohls/Best Buy
Seven FUNctions of Marketing Marketing Information Management:How are you going to obtain information about customers & current trends?
Gather information Customer surveys Ask your zip code when you check out Sign up for email
Store information Analyze information
Pricing: What do you charge in order to make a profit?
How much it costs you to produce. What are your competitors charging. How much are customers willing to pay.
Seven FUNctions of Marketing Product/Service Management:
Product Development Maintaining quality products Product Improvements
Promotion: Inform – Socially Responsible Company Persuade – Commercials/Advertisements Remind
Seven FUNctions of Marketing Selling
Providing customers with what they want.
The Marketing Concept is the idea that a business should strive to satisfy customers’ needs and wants while generating a profit for the firm. Customer Satisfaction is very important.
Repeat customers are what make businesses successful! Customer Relationship Management
If businesses don’t make money, they don’t do it!
The Importance of Marketing
Section 1.2
Bellwork How does Best Buy add value to the
purchase of a computer? Warranty Geek Squad Promotional Financing
No interest storewide all purchases totaling$499 & up if paid in full within 18 months
Economic Benefits of Marketing How does Marketing Benefit the Economy?
Increases competition Develop New & Improved Products at Lower Prices
I-Phone Nintendo Cars Computers
Add value to your shopping experience Utility
All have come out with new and improved products at cheaper prices
Examples of Competition 1977: First VCR was sold………………$700.00 2009: Magnavox DVD/VCR player…….$67.00
2006: Samsung Blu-Ray Disc Player……$599.99 2009: Magnavox Blu-Ray Disc Player….$129.00
1975: IBM 5100 with 64K memory………$19,975.00 2009: Gateway Computer with 4 GB……..$479.99
Economic Utilities Utilities are the attributes of a product or service
that make it capable of satisfying consumers’ wants and needs.
There are five economic utilities:1. Form
2. Place
3. Time
4. Possession
5. Information
The Five Economic Utilities Form Utility: Provided when someone produces something
tangible. Example: zipper, spool of thread, cloth = jacket
Place Utility: Having the product available where the consumer wants it. Catalogs Internet Retailers
How does J Crew allow customers to purchase their product? Retail Stores, store website, catalogs
The Five Economic Utilities Possession Utility: Obtaining a good or service and
having the right to use or consume it. When a product goes from the business owning it to the
consumer Usually involves the exchange of money
Alternatives to cash: Credit Card, Debit Card, Personal Check Lay-away plan
Time Utility: Having the product available when the consumer wants it. 24 Hour Gas Station Extended hours during holiday season
The Five Economic Utilities Information Utility: Involves
communication with the customer. Salesperson explains benefits & features of a
product Displays/Packaging Product labels Owners Manuals Websites
Fundamentals of Marketing
Section 1.3(Most important section in book)
Fundamentals of Marketing Marketers realize that not every product can appeal
to everyone. Marketers examine two key things to define their
market: Who is interested in a product? Who can afford their product?
A market is made up of all people who share similar needs and wants and who have the ability to purchase your product. MUST MEET BOTH CRITERIA TO BE INCLUDED
Examples of a Market Luxury Suites at the new Yankees Stadium
Prices range from $600,000 and $850,000 Rich, Men, Sports Fans,
Malt-O-Meal Frosted Flakes $1.41/box at DollarDays International
Lower Income, Kids/Single Parents
Hollister Co. Santa Monica Jacket $140 jacket
Teenage Girls, Colder climate areas, Medium-High Income Families
Consumer v. Industrial Markets Consumer Market: Consists of consumers who
purchase goods and services for personal use. Saves them money Improves appearance Makes life easier
Industrial Market: (Business-to-Business/b2b)
All businesses that buy products for use in their operations. Improve profits Increase Productivity Decrease Expenses
Market Share A market is also determined by the total sales in a
product category. Examples: Soft Drinks, Ice Cream, Video Games
A company’s market share is its percentage of the total sales volume generated by all companies that compete in a given market.
Example:
If 2 million of the 10 million SUV’s sold in the United States are made by Chevrolet.
Chevrolet’s Market Share would be 20% of the S.U.V. industry.
Target Market & Market Segmentation Market Segmentation is the process of classifying
customers by needs and wants. Goal is to identify the group of people who are most
likely to become customers. This specific group is known as a Target Market
All marketing strategies are directed towards the target market. Provides the focus of your marketing campaign. Marketer’s must develop a clear target market before developing a
marketing strategy.
Consumer v. Customer A product may have more than one target market.Example: Low Sugar Fruity PebblesIdentify the consumer: ChildrenIdentify the customer: Parents*Most five year olds do not purchase their Fruity Pebbles
Same Product--- Different Approach
To target parents you would use commercials that advertise how healthy they are and air them on a Saturday night.
To target children you would use commercials that focus on how fun the cereal is, the bright colors, the cool characters and air this commercial on Saturday mornings.
Target Market To develop a clear picture of their target market,
businesses create customer profile lists of information about the target market. Age Income Level Ethnic Background Occupation Attitudes Lifestyle Geographic Residence
Understanding these characteristics allows you to make better choices
The Marketing Mix The Marketing Mix includes four basic
marketing strategies called the four P’s:1. Product2. Place3. Price4. Promotion5. *People
These are the tools that marketers use to influence potential customers
Marketing Mix Each of the 4 P’s are interconnected
Actions in one area affect decisions in another
Every decision a marketer makes revolves around these four things: How to reach customers How to satisfy customers How to keep customers How to achieve company’s goals
Marketing Mix Product: Determining what products you want to
make and sell. Product Design & Development Includes:
Product features Brand name Packaging Service Warranty
Product updates and new target markets extend product life
Marketing Mix Place: How you get the product into the
customer’s hands. Need to know where your customers shop Determines how and where your product will be
distributed What retail outlets to sell at What Transportation Methods to use What is an effective stock/inventory level to maintain
Marketing Mix Price is what is to be exchanged for the
product. Should reflect what the customer is willing and
able to pay Needs to examine competitor’s prices on
comparable products
Marketing Mix Pricing Strategies include:
Manufacturer’s Suggested Retail Price (MSRP) Discounts Credit Terms Payment Period Special Promotional Price
Common with new products Auto Industry uses employee pricing
Marketing Mix Promotion refers to decisions about
advertising, personal selling, sales promotion, and publicity. How you decide to inform potential customers
about a product: The message you convey The media selected Special offers Timing of promotion campaigns
