essential standard 3.00

Essential Standard 3.00

Understand the role marketing in business.

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Objective 3.01

Understand principles of marketing.

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Topics

• Functions of marketing

• Importance of marketing research to the creation or improvement of products or services

• Selling prices of products and services

• Classification of channels of distribution

• Classification of the main types of promotion

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Functions of marketing

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Functions of Marketing

• What happens during the marketing process?

• Activities of marketing happen throughout the seven functions of marketing

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Functions of Marketing continuedSeven functions of marketing:

– Product/service management

– Distribution

– Selling

– Marketing-information management

– Financing

– Pricing

– Promotion6

Marketing Information Mgt.

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Marketing-information management involves obtaining, managing, and using information about products and services, customers, and competitors to improve business decision-making and the performance of marketing activities.

Pricing

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Pricing involves determining and communicating the value of products and services.

Product Service Mgt.

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Product/service management may include several businesses involved with designing, developing, maintaining, improving, and obtaining products and services in order to meet the needs of customers.

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Promotion involves communicating information such as features and prices about products and services to potential customers

Distribution

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Distribution (Place) involves using the best ways for customers to locate, obtain, and use the products and services of a business.

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Selling involves communicating directly with potential customers in order to determine and satisfy their needs and wants

Financing

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Financing involves budgeting for marketing activities, securing necessary funds for operations, and providing financial assistance to customers

Importance of marketing research to the

creation or improvement of products or services

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Marketing Research

• What is marketing research?Marketing research involves customers in order to find solutions to

problems through carefully designed studies

• Steps in marketing research:Define the marketing problem. Study the situation. Develop a data collection procedure.Gather and analyze information.Propose a solution.

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Marketing Research continued

Types of research studies– Surveys– Focus groups– Observations– Experiment

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Good/Products vs. ServicesSimilar Different

Goods/Products Services 1.Meet the needs or satisfaction of a target market2.Include a mix of the marketing elements: product, price, promotion, and place (distribution)

Goods/Products

TangibleNon-perishableSeparableEasier to marketMore control over quality 

Services

IntangiblePerishableInseparableMore difficult to marketLess control over quality

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Marketing Research continued

Parts of a product– Basic product– Product features– Options– Brand name– Packaging– Warranty

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Marketing Research continued

Similarities of products and services

• Meet the needs or satisfaction of a target market

• Include a mix of the marketing elements (product, price, promotion, and distribution)

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Marketing Research continued

Differences between products and services

Products Services

Tangible Intangible

Perishable or non-perishable Perishable

Separable Inseparable

Easier to market More difficult to market

More control over quality Less control over quality

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Selling prices of products and services

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Selling Prices of Products and Services• What factors influence the pricing of

products and services?

• Pricing formula

Selling price=product costs+operating expenses+profit

Example: $215=67+38+100

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Selling Prices of Products and Services continued• Markup

– The amount charged of the selling price to cover the operating expenses and profit usually stated as a percent.

– Selling price=product cost+markup– Example: $35+$14=$49– $35*40%=$14

• MarkdownA reduction from the original selling price.

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Classification of channels of distribution

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Classification of Channels of Distribution• What is channel of distribution?

• How do the needs between producers and consumers differ? They differ by:– Quantity– Assortment– Location– Timing

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Classification of Channels of Distribution continued• Channels of distribution allow businesses to

adjust quantity and assortments accessible in convenient locations for customers and storage of products.

• Types of channels of distribution:– Direct

Example-Tonya makes and sells drapes to local customers.

– IndirectExample-UPS delivers packages to constomers for Ann Taylor Clothing Store.

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Classification of the main types of promotion

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Classification of the Main Types of Promotion• Effective communication consists of an

understanding of information between the sender and the receiver.

• The sender selects a channel of communication and the receiver indicates understanding by providing some form of feedback.

• What is the relationship between effective communication and promotion?

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Classification of the Main Types of Promotion continued• Main types of promotion:

– Personalized is customized for individual customer.– Mass is communicated with many people with a

common message.

• Some types of mass promotion:– Advertisement– Publicity– Public relations– Sales promotion

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