Essential Standard 3.00

1. Essential Standard 3.00 Understand the role marketing in business.

2. Objective 3.01 Understand principles of marketing.

3. 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

4. Functions of marketing

5. Functions of Marketing • What happens during the marketing process? • Activities of marketing happen throughout the seven functions of marketing

6. Functions of Marketing continued Seven functions of marketing: • Product/service management • Distribution • Selling • Marketing-information management • Financing • Pricing • Promotion

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

8. Functions of Marketing continued • Selling involves communicating directly with potential customers in order to determine and satisfy their needs and wants. • 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

9. Functions of Marketing continued • Financing involves budgeting for marketing activities, securing necessary funds for operations, and providing financial assistance to customers. • Pricing involves determining and communicating the value of products and services. • Promotion involves communicating information such as features and prices about products and services to potential customers.

10. Importance of marketing research to the creation or improvement of products or services

11. Marketing Research • What is marketing research? • Steps in marketing research: • Define the marketing problem. • Study the situation. • Develop a data collection procedure. • Gather and analyze information. • Propose a solution.

12. Marketing Research continued Types of research studies • Surveys • Focus groups • Observations • Experiment

13. Marketing Research continued Parts of a product • Basic product • Product features • Options • Brand name • Packaging • Warranty

14. Marketing Research continued • Basic product is simplest form of a product or service. • Product features include additions and improvements to the product or service. • Options include choices of the product or service

15. Marketing Research continued • Brand name is a company’s unique identification for a product or service. • Packaging is the protection and security of a product or service before it is used. • Warranty is an offer to repair, replace, or provide a refund a product or service in order to build the confidence of consumers in a business

16. 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)

17. Marketing Research continued Differences between products and services ProductsServices Tangible Intangible Perishable Non-perishable Inseparable Separable Easier to market More difficult to market More control over quality Less control over quality

18. Selling prices of products and services

19. Selling Prices of Products and Services • What factors influence the pricing of products and services? • Supply and demand • Uniqueness • Age • Season • Complexity • Convenience

20. Selling Prices of Products and Services • Pricing formula Selling price=product costs+operatingexpenses+profit Example: $215=67+38+100

21. 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 • Markdown A reduction from the original selling price.

22. Classification of channels of distribution

23. Classification of Channels of Distribution • What is channel of distribution? • The channels of distribution is how products and services reach final customers and the businesses involved • How do the needs between producers and consumers differ? They differ by: • Quantity • Assortment • Location • Timing

24. Classification of Channels of Distribution • Quantity-Businesses produce or sell massive quantities of products and services, where as each consumer needs fewer numbers. • Assortment-Businesses usually specialize in producing a specific type of products and services, where as consumers usually purchase a variety of products and services.

25. Classification of Channels of Distribution • Location-Businesses may distribute products and services to customers in other countries as well in local communities. • Timing-There could be a gap in time when businesses produce products and services as to when consumers need them.

26. 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-UPS delivers packages for Ann Taylor. • Indirect Example-Tonya makes and sells drapes to local customers.

27. Classification of the main types of promotion

28. 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.

29. Classification of the Main Types of Promotion • What is the relationship between effective communication and promotion? • Businesses use promotion to communicate with potential customers about their products and services. Information about products and services is encoded in a promotional message. Promotional messages may be delivered through advertisements and sales representatives. Potential customers decode the message and provide feedback by way of purchasing or inquiring about products or services.

30. 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