Marketing in Today's World: The Basics of Creating, Promoting, and Selling Products

1. CHAPTER 13 MARKETING in TODAY’S WORLD

2. The Basics of Marketing Market A market is a group of customers who share common wants and needs, and who have the ability to purchase a particular product or service.

3. The Basics of Marketing • MARKETING is the process of creating, promoting, and presenting a product to meet the wants and needs of consumers.

4. Marketing • Marketing involves a number of stages, from studying what people want to buy to designing a product’s packaging. • Businesses perform detailed research to find and analyze potential customers in their market. • Knowing what groups of people want and need helps companies decide how and what to sell.

5. The Functions of Marketing These functions define all the aspects that are part of marketing. • Distribution- how to get goods into the customers’ hands…moving, storing goods is part of distribution. • Financing- getting the money needed to set up a business, loans, stock options. Also, whether to offer credit to customers.

6. 7 Functions of Marketing • Marketing Information Management- information about trends, customer, and competing products. Gathering, storing it, and analyzing information. • Pricing- What to charge customers based on costs and competition.

7. The Functions of Marketing • Product/Service Management-obtaining, developing, maintaining, and improving a product in response to market opportunities. • Promotion- effort to inform, persuade, or remind potential customers about goods or services • Selling- selling to retail customers or B-2-B. A popular trend in today’s marketing world is RELATIONSHIP MARKETING. Companies use this strategy to build customer relations.

8. Marketing Mix4P’s of Marketing Combination of 4 basic marketing strategies – product, price, place, and promotion -use and control to influence potential customers. -control decisions about each of the 4P’s and base them on the people they want to win over - Marketers must first define each target market …..5th P = people

9. Marketing Mix-4 P’s • Product – • Marketing is used first to find out if there is a demand for a product. • Marketing predicts how to present a product to the customer to make it as appealing as possible. • Packaging is a major part of marketing. It includes the design, color, size, and brand name of a product

10. Marketing Mix-4 P’s • Place/Distribution – • Marketers have to decide how and where customers will buy their goods and services. • Marketers have to consider in what kind of location to sell their product. Should it be in a large department store or a boutique? • Select the right channel of distribution • The placement of the product in a store is important.

11. Channel of Distribution • A Channel of Distribution is a pathway to direct products to consumers. • Direct Distribution occurs when goods or services are sold from the producer directly to the customer • Indirect Distribution involves one or more intermediaries. Distribution decisions affect the price of products • The cost of distributing a product has to be added to its price

12. Marketing Mix-4 P’s • Price • To determine the price of a product a marketer considers three questions • How much are customers willing to pay? • Is the price competitive with other products? • Can the company make a profit? • BREAK-EVEN POINT • price = costs/expensive

13. Marketing Mix-4 P’s Promotion – Making customers aware of the product. Making decisions about advertising, personal selling, sales promotion, and publicity The most familiar form of promotion is advertising, other ways to promote a product is to offer discounts in the form of coupons, rebates, and sales. They can also give away items.

14. Market Research • It helps businesses make decisions. • Gathering and analysis of information on the size, location, and makeup of a market. • Helps businesses determine consumer’s wants and needs • Helps businesses to produce products that attract customers.

15. Market Research • Marketing Concept involves determining the wants and needs of customers and providing them more efficiently and effectively than competitors. • The focus is on the customer…repeat customers keep a company in business.

17. Information About Consumers • Demographics – facts about the population such as age, gender, education, and income. • This information comes from surveys, sales figures for current products, data bases and the census.

18. Information About Consumers • Marketers gather information about the people who make up the market. • Businesses aim their product or service at a group of potential customers. • Target Marketinghelps companies focus on the people most likely to buy their goods or services. • Make products to fit the target market

19. Information About Consumers • Market Segmentation is the division of a market for a product into groups of customers who have the same needs and traits.

20. The Seven Steps of Product Development • New products energize the marketplace. • A company’s ability to create a new product or a slight variation of an already successful one is important to increasing sales.

21. The Seven Steps of Product DevelopmentProduct Development…The seven steps for developing a new product are: • Generate Ideas • Screen Ideas • Develop a Business Plan • Develop the Product • Test Market the Product • Introduce the Product • Evaluate Customer Acceptance

22. The Seven Steps of Product DevelopmentProduct Development…The seven steps for developing a new product are: • Step 1: Generate Ideas • Usually takes more than 1 person to come up with new ideas. • Brainstorming: Workers get together to think of new products • Workers from a company’s development department, market research staff, and outside market researches • Collaboration is key in this step

23. The Seven Steps of Product DevelopmentProduct Development…The seven steps for developing a new product are: • Step 2: Screen Ideas • Once the team puts together a list of ideas for a product, the team must evaluate each idea. • How do these ideas fit the company’s mission and strategy? • Does the new product compete with one of the company’s existing products? • Consumers can identify what they liked or disliked about the concept? • Their responses are crucial as to whether the company continues with a proposed product

24. The Seven Steps of Product DevelopmentProduct Development…The seven steps for developing a new product are: • Step 3: Develop a Business Plan • The written proposal provides a look at the market • Estimated sales, costs, profit potential, market trends, and competing products

25. The Seven Steps of Product DevelopmentProduct Development…The seven steps for developing a new product are: • Step 4: Develop the Product • Make a prototype: a model of the actual product. • What the new product will look like • Tests how it can be made • If any aspects of the prototype need to be changed, now is the time to make changes. • A company might experience delays in finalizing the product as it is tested

26. The Seven Steps of Product DevelopmentProduct Development…The seven steps for developing a new product are: • Step 5: Test-Market the Product • Once the product is fully developed, it should be test-marketed • Test Market a product means to offer it in a limited market for a limited time. • The goal is to collect customers’ responses to determine if the product is likely to be a success. • Testing may give a competitor time to produce a similar product. • Then both products may enter the market at the same time, and the first firm loses its competitive advantage

27. The Seven Steps of Product DevelopmentProduct Development…The seven steps for developing a new product are: • Step 6: Introduce the Product • A publicity campaign introduces the product. The costs of launching a new product are often high. • The company has a short time in the market before competitors start to develop similar products.

28. The Seven Steps of Product DevelopmentProduct Development…The seven steps for developing a new product are: • Step 7: Evaluate Customer Acceptance • Marketers track customers and their responses to it. • Their reports answer key questions that can be used in the company’s research and development plans. • Who are the best customers? • What new products are they buying? • How often do customers buy the new product? • If customers like the new product, the company will continue to produce it. If not enough customers like it, it may not be on the market long