objective 3.01 understand principles of marketing 1
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Objective 3.01
Objective 3.01
Understand principles of
Understand principles of
marketingmarketing
1
Topic
sTo
pic
s
Functions of marketing
Functions of marketing
Importance of marketing
Importance of marketing
research to the creation
research to the creation
or improvement of
or improvement of products or services
products or services Selling prices of
Selling prices of products and services
products and services
Classification of
Classification of channels of distribution
channels of distribution
Classification of the
Classification of the
main types of promotion
main types of promotion
2
Functions of
Functions of
marketingmarketing
3
Funct
ions
of
Funct
ions
of
Mark
eti
ng
Mark
eti
ng
What happens during
What happens during
the marketing process?
the marketing process?
Businesses are involved in
Businesses are involved in
the process of origin,
the process of origin,
pricing, promotion, and
pricing, promotion, and
distribution of products
distribution of products
and services.
and services. These products and
These products and
services are made
services are made available in order to meet
available in order to meet
the goals of individuals
the goals of individuals
and businesses.
and businesses. Activities of marketing
Activities of marketing
happen throughout the
happen throughout the
seven functions of
seven functions of marketing marketing
4
Funct
ions
of
Funct
ions
of
Mark
eti
ng
Mark
eti
ng
conti
nued
conti
nued
Seven functions of marketing:
Seven functions of marketing:
Product/service management
Product/service management
Designing, developing, maintaining, improving,
Designing, developing, maintaining, improving,
and obtaining products/services to meet the
and obtaining products/services to meet the
needs of customers
needs of customers
DistributionDistribution
Using the best ways for customers to locate
Using the best ways for customers to locate
obtain, and use the products /services of a
obtain, and use the products /services of a
businessbusiness
SellingSelling
Communicating directly with potential
Communicating directly with potential
customers to locate, obtain, and use the
customers to locate, obtain, and use the
products /services of a business.
products /services of a business.
Marketing-information management
Marketing-information management
Obtaining, managing, and using information
Obtaining, managing, and using information
about products /services, customers, and
about products /services, customers, and
competitors to improve business decision-
competitors to improve business decision-
making and the performance of marketing
making and the performance of marketing
activitiesactivities
FinancingFinancing
Budgeting for marketing activities, securing
Budgeting for marketing activities, securing
funds, and providing financial assistance to
funds, and providing financial assistance to
customerscustomers
PricingPricing
Determining and communicating the value of
Determining and communicating the value of
products /services
products /services
PromotionPromotion
Communicating features and prices about
Communicating features and prices about
products /services to potential customers
products /services to potential customers
5
Importance of
Importance of
marketing marketing
research to the
research to the
creation or creation or
improvement
improvement
of products or
of products or
servicesservices
6
Mark
eti
ng
Mark
eti
ng
Rese
arc
hRese
arc
h
What is marketing
What is marketing research?research? Using customers in order
Using customers in order
to find solutions to
to find solutions to problems through
problems through carefully designed studies
carefully designed studies
Steps in marketing
Steps in marketing
research:research:Define the marketing
Define the marketing
problem. problem. Study the situation.
Study the situation.
Develop a data collection
Develop a data collection
procedure.procedure.Gather and analyze
Gather and analyze
information.
information.Propose a solution.
Propose a solution.
7
Mark
eti
ng
Mark
eti
ng
Rese
arc
h
Rese
arc
h
conti
nued
conti
nued
Types of research
Types of research studiesstudies Surveys
Surveys Focus groups
Focus groups Observations
Observations ExperimentExperiment
8
Mark
eti
ng
Mark
eti
ng
Rese
arc
h
Rese
arc
h
conti
nued
conti
nued
Parts of a product
Parts of a product Basic product
Basic product Simplest form of a
Simplest form of a product/service
product/service Product features
Product features Additions and improvements to
Additions and improvements to
the product/service
the product/service
OptionsOptions Choices of the product/service
Choices of the product/service
Brand name
Brand name Company’s unique identification
Company’s unique identification
PackagingPackaging Protection and security before it
Protection and security before it
is usedis used Warranty
Warranty Offer to repair, replace, or
Offer to repair, replace, or
provide a refund in order to build
provide a refund in order to build
the confidence of consumers
the confidence of consumers
9
Mark
eti
ng
Mark
eti
ng
Rese
arc
h
Rese
arc
h
conti
nued
conti
nued
Similarities of products
Similarities of products and services
and services Meet the needs or
Meet the needs or satisfaction of a target
satisfaction of a target
marketmarket Include a mix of the
Include a mix of the marketing elements
marketing elements (product, price,
(product, price, promotion, and
promotion, and distribution)
distribution)
10
Mark
eti
ng
Mark
eti
ng
Rese
arc
h
Rese
arc
h
conti
nued
conti
nued
Differences between
Differences between
products and services
products and services
ProductsProducts
ServicesServices
TangibleTangibleIntangible
IntangiblePerishablePerishable
Non-perishable
Non-perishableInseparableInseparable
Separable
SeparableEasier to market
Easier to market
More difficult to market
More difficult to market
More control over quality
More control over quality
Less control over quality
Less control over quality
11
Selling prices of Selling prices of products and servicesproducts and services
12
Selli
ng P
rice
s of
Selli
ng P
rice
s of
Product
s and
Product
s and
Serv
ices
Serv
ices
What factors influence
What factors influence
the pricing of products
the pricing of products
and services?
and services? supply & demand,
supply & demand, uniqueness, age, season,
uniqueness, age, season,
complexity, convenience
complexity, convenience Pricing formula
Pricing formulaSelling price=product
Selling price=product costs+operating
costs+operating expenses+profit
expenses+profitExample: Example: $215=67+38+100
$215=67+38+100
13
Selli
ng P
rice
s of
Selli
ng P
rice
s of
Product
s and
Product
s and
Serv
ices
conti
nued
Serv
ices
conti
nued
MarkupMarkup The amount charged of
The amount charged of
the selling price to cover
the selling price to cover
the operating expenses
the operating expenses
and profit usually stated
and profit usually stated
as a percent.
as a percent. Selling price=product
Selling price=product
cost+markup
cost+markup Example: $35+$14=$49
Example: $35+$14=$49
$35*40%=$14
$35*40%=$14 Markdown
MarkdownA reduction from the original
A reduction from the original
selling price.
selling price.
14
Classification of channels
Classification of channels
of distribution
of distribution
15
Cla
ssifi
cati
on o
f
Cla
ssifi
cati
on o
f C
hannels
of
Channels
of
Dis
trib
uti
on
Dis
trib
uti
on
What is channel of distribution?
What is channel of distribution?
How products/services reach final
How products/services reach final
customers and businesses
customers and businesses
involvedinvolved
How do the needs between
How do the needs between
producers and consumers
producers and consumers
differ? They differ by:
differ? They differ by: Quantity
Quantity business=lots; consumer=fewer
business=lots; consumer=fewer
AssortmentAssortment businesses=specialize in specific
businesses=specialize in specific
typetype Consumers=purchase a large variety
Consumers=purchase a large variety
of products/services
of products/services
LocationLocation global or local
global or local Timing
Timing Can be a gap in time when
Can be a gap in time when
businesses produce
businesses produce
products/services as to when
products/services as to when
consumers need them
consumers need them
16
Cla
ssifi
cati
on o
f
Cla
ssifi
cati
on o
f C
hannels
of
Channels
of
Dis
trib
uti
on
Dis
trib
uti
on
conti
nued
conti
nued
Channels of distribution
Channels of distribution
allow businesses to adjust
allow businesses to adjust
quantity and assortments
quantity and assortments
accessible in convenient
accessible in convenient
locations for customers
locations for customers
and storage of products.
and storage of products.
Types of channels of
Types of channels of
distribution:
distribution:DirectDirect
between producer and
between producer and
consumerconsumer
Example-UPS delivers
Example-UPS delivers
packages for Ann Taylor.
packages for Ann Taylor.
IndirectIndirect
Uses one or more other
Uses one or more other
businesses to move product
businesses to move product
from producer to consumer
from producer to consumer
Example-Tonya makes and
Example-Tonya makes and
sells drapes to a retailer who
sells drapes to a retailer who
sells to local customers.
sells to local customers.
17
Classification of
Classification of
the main types
the main types
of promotionof promotion
18
Cla
ssifi
cati
on o
f th
e
Cla
ssifi
cati
on o
f th
e
Main
Typ
es
of
Main
Typ
es
of
Prom
oti
on
Prom
oti
on
Effective Effective communication consists
communication consists
of an understanding of
of an understanding of
information between
information between
the sender and the
the sender and the receiver.receiver. The sender selects a
The sender selects a
channel of channel of communication and the
communication and the
receiver indicates
receiver indicates understanding by
understanding by providing some form of
providing some form of
feedback.feedback.
19
What
is t
he r
ela
tionsh
ip
What
is t
he r
ela
tionsh
ip
betw
een e
ffect
ive
betw
een e
ffect
ive
com
munic
ati
on a
nd
com
munic
ati
on a
nd
pro
moti
on?
pro
moti
on? Businesses use promotion
Businesses use promotion
to communicate with
to communicate with
potential customers about
potential customers about
their products and services.
their products and services.
Information about products
Information about products
and services is encoded in
and services is encoded in
a promotional message.
a promotional message.
Promotional messages may
Promotional messages may
be delivered through
be delivered through
advertisements and sales
advertisements and sales
representatives.
representatives. Potential customers decode
Potential customers decode
the message and provide
the message and provide
feedback by way of
feedback by way of
purchasing or inquiring
purchasing or inquiring
about products or services.
about products or services.
20
Cla
ssifi
cati
on o
f th
e
Cla
ssifi
cati
on o
f th
e
Main
Typ
es
of
Main
Typ
es
of
Prom
oti
on c
onti
nued
Prom
oti
on c
onti
nued
Main types of
Main types of promotion:promotion: Personalized is customized
Personalized is customized
for individual customer.
for individual customer.
Mass is communicated
Mass is communicated
with many people with a
with many people with a
common message.
common message. Some types of mass
Some types of mass
promotion:promotion: Advertisement
Advertisement Publicity
Publicity Public relations
Public relations Sales promotion
Sales promotion
21
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