chapter 8 intro to business producing and marketing goods and services

Chapter 8Intro to Business

Producing and Marketing goods and Services

Role of Marketing

1. Idea for development of a new product.2. Select product name3. Where products sold and how to get them

there. (Channels of Distribution)4. Set price and how people can pay for it.

1. (cash and carry/credit)

5. Customer service and product improvement after product is sold.:)

Marketing Functions1) Product/Service Planning-assists in design and

development by gathering information and testing ideas.

2) Purchasing-identify and obtain the products needed for marketing activities.

3) Financing-make sure financing and credit are available for purchase and sale of products.

4) Distribution-getting products to customers.5) Pricing-set prices and payment method.6) Risk Management-provides security and safety

for products and people and reduces business risk.7) Marketing Information Management-obtains

and organizes information needed to make marketing decisions.

8) Promotion-communicating with consumers to encourage purchase.:)

A Marketing Philosophy

The philosophy of business is known as the marketing concept , which considers the needs of customers when planning, pricing, distributing, and promoting a product or service.

– To be successful, the business must be able to:1) Identify customers they want to serve and

understand their needs.2) Develop a product that will satisfy the

customer and complete the necessary marketing activities.

3) Complete these activities at a profit.:)

A Marketing Strategy

Is a two step process that involves:1. Target Market-A clearly identified group of

consumers with needs that the business want to satisfy.

2. Marketing Mix-a combination of marketing elements designed to meet the needs of a target market.• The 4 P’s of Marketing:

1. Product-anything offered to the target market to satisfy their needs (products or services).

2. Place-locations where product sold convenient to customers.

3. Price-what customers are able to pay and method of payment.

4. Promotion-methods used to communicate information to customers in order to encourage purchase.:)

Six Steps of Product Development

Buying Motives-the reasons for making a purchase. (sometimes rational and logical, sometimes not):)

Getting Products and Services to Consumers

Channel of Distribution-is the path that a product travels from producer to consumer. Direct Channel of Distribution-from

producer to consumer. Indirect Channel of Distribution-goods

move through one or more middle firms between producer to consumer.

Wholesaler-a middle firm that assists with distribution activities between businesses.

Retailer-sells directly to consumer (may obtain goods from wholesaler or producer) collect products of many manufacturers and resells them. (Wal-Mart, Target, Meijers):)

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Characteristics of Effective Distribution

4 important differences to consider in developing an effective channel of distribution.1. Differences in Quantity-adjusts the large

quantity produced to the small quantity purchased.

2. Differences in Assortment-accumulate many varieties of products in one place.

3. Differences in Location-brings products from all over the world to convenient locations.

4. Differences in Time-having the right products at the right time.:)

The Role of Pricing

Objectives of Pricing-one of three goals1. Maximize Profits-“how?”2. Increase Sales-”how?”3. Maintain Image-”how?” (Kobe!)

Factors that will influence Price1. Quantity-Walmart????2. Customer Service Offered3. Fragile and requires special handling.4. Businesses in the channel of distribution-

direct vs. indirect.5. Amount of advertising and

Communications necessary to inform consumers.:)

The Role of Pricing

Promotional methods (3)1. Who are prospective customers being

targeted? How many and where?

2. What is the Message?3. What is the budget for promotion?