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Introduction To Marketing Marketing Functions Utility Marketing Concept
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Introduction To Marketing
Marketing FunctionsUtility
Marketing Concept
The process of developing, promoting, and distributing products
to satisfy customers’ needs and wants.
What Is Marketing?
Products – goods and services that have monetary value
Goods – things you can touch or hold
Services – you can’t physically touch – tasks performed for a customer
Marketing is based on Exchange
Marketing connects business’ to their customers.
ExchangeAn exchange
takes place every time something is sold in the marketplace.
EXCHANGEWhen the producer is someone other than the consumer, some form of exchange takes place.
Foundations of Marketing
Business, Management, EntrepreneurshipCommunication and Interpersonal SkillsEconomicsProfessional Development
Functions of Marketing
Activities that work together to get goods and services from producers to consumers
Each is essential
Distribution
Deciding where and to whom products need to be sold to reach the final users.
Financing
Getting the money necessary to operate a business
Marketing Information Management
Getting information to make sound business decisions. Usually obtained through marketing research
For example, after a stay at a luxury hotel, you fill out a form rating the service and accommodations.
Pricing
How much to charge to maximize profits
Product Service Management
Obtaining, developing, maintaining, and improving a product or a product mix in response to market opportunities.
Promotion
Communicating with potential customers to inform, persuade, or remind them about a business’s products
Selling
Planned, personalized communication that influences purchasing decisions
The Marketing Concept
Businesses must satisfy customers’ needs and wants in order to make a profit
Click on the Model T Ford to see Henry Ford’s thoughts about car color in the early 1900’s.
When Henry Ford first created the Model T, he was the only one mass producing cars. He didn’t have to think about “The Marketing Concept.” But, as more and more producers started making cars, they had to think about what customers need and want in order to stay in business.
Imagine if, in today’s world, you could only buy black. Many customers would not be
very happy!
The Marketing Concept
If automobile manufactures do not give their customers a choice (what they want), they will not stay in business.
That concept is true for all businesses.You must give the customer what they need and
want.
The Marketing Concept
Businesses must satisfy customers’ needs and wants in order to make a profit
That is what we mean by The Marketing Concept
Businesses must know their customers . . .
Economic Benefits of Marketing
Marketing bridges the gap between you and the maker or seller of an item
New and Improved Products --businesses look for opportunities to please the customer
Economic Benefits of Marketing
Lower Prices – marketing activities add value and increase demand. When demand is high, manufacturers can produce at a lower price. They can sell at a lower price but increase the quantity sold. Thus, profits are higher even though prices are low.
Economic Benefits of Marketing
Economic Benefits of Marketing
It adds VALUE
Added Value = Utility
In economic terms, utility does not mean your closet or the electric company.
There are five types of Utility:
Attributes of a product or service that make it capable of satisfying consumers’ wants and needs.
Added Value = Utility
Form UtilityChanging raw materials or putting parts together to make them more useful – making and producing things.
• Sand into glass
• Wood into paper
• Silk into fabric
It Involves
Location – may be through a catalog or at a retailer (actual store) – or, Internet.
Transporting the product to the location.
Time Utility
Having a product available at a certain time of year or a convenient time of day.
• Planning and ordering
• Time of day and week
• Time of year: holidays and seasons
The exchange of a product for some monetary value.
Possession Utility
Payment may be made by
CashPersonal checksCredit cards Installments (layaway)
Involves communication with the consumer.
Information Utility
• ads
•packaging
• signs
• displays
•owner’s manuals
Which types of utility are related to marketing?
Form utility is a function of production, NOT marketing
These utilities ARE directly related to marketing:
Place Time Possession Information
Market – all potential customers who have the ability and willingness to buy
Consumer Markets
Consist of consumers who purchase goods and services for personal use.
Industrial MarketsBusiness-to-business (B-to B) markets
include all businesses that buy products for use in their operations.
Market ShareA company’s percentage of the total sales
volume generated by all companies that compete in a given market.
Target Marketing
Focusing all decisions on a very specific group of people who you want to reach.
Customer Profile
To develop a clear picture of their target market, businesses create a customer profile.
It lists information about the target market, such as age, income level, occupation, attitudes, lifestyle, and geographic residence
Customers –
people who buy the product
Consumers – people who actually use the product
Is mom the customer or the consumer? The kids?
Marketing Mix
Basic marketing strategies – the four P’s
ProductPlacePricePromotion
Product Strategies What product to make How to package it What brand name to use What image to project
Place Strategies How and where a
product will be distributed.
Price Strategies
Reflect what customers are willing and able to pay.
Promotion StrategiesHow potential customers will be told
about the new productWhat the message will beWhen and where it will be deliveredWhat inducements are there to buy
The Marketing Mix
The elements are interconnected
ProductPlace
Price
Promotion
The Marketing Mix – The 4 P’s
Contains countless alternatives.Management must select a combination of
marketing mix decisions that will satisfy target markets and achieve organizational goals.
Analyzing Markets
Market segmentation is a way of analyzing a market by specific characteristics in order to create a target market
Types of Segmentation:
DemographicsPsychographicsGeographicsBehavioral
Demographics – statistics that describe a population in terms of personal characteristics.
AgeBaby Boom GenerationGeneration X Generation Y
Gender
IncomeDisposable income –
money left after taking out taxes
Discretionary income – money left after paying for basic living necessities such as food, shelter, and clothing
Marital Status
Psychographics
Involves grouping people with similar lifestyles, as well as shared attitudes, values, and opinions. Activities Attitudes Personality & Values
Behavioral SegmentationLooking at the benefits desired by
consumers, shopping patterns, and usage rate. Market benefits, not just the physical characteristics of a product
Behavioral Segmentation
Many businesses find that the 80/20 rule applies.
80 % of a company’s sales are generated by 20 % of its loyal customers.
Mass Marketing Vs Segmentation
Mass marketing not as popular as it once was.Niche marketing (the current trend) – markets
are narrowed down and defined with extreme precision.
