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1.1 An Introduction to Marketing

Intro to Marketing BMI3C1 September 2009

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NGWhat is Marketing?

• Marketing is the sum of all the activities involved in the planning, pricing, promoting, distributing and selling of goods and services to satisfy consumers’ needs and wants

• Connects Suppliers to End UsersSuppliers End Users

Supplier Item Marketed End User

Manufacturers Products Consumers

Service Businesses Expertise Potential Customers

Politicians Ideas Potential Voters

Not-for-Profit Organizations CauseBenefits

Potential DonorsPotential Clients

Individuals Skills & Abilities People and Organizations.

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NGMarketing

• Comes from the word ‘market’, which is used in two ways• For example General Motors markets cars to consumers by

advertising their benefits

• Marketing also refers to the potential buyers or end users of the product.

• Coca-Cola is in the ‘soft drink market’ and markets several products– Cola– Diet cola– Sprite– Minute Maid to different consumers ( or market segments)

• The ‘soft drink market’ is just a segment of the total beverage market that includes water, juice, coffee, teas, liquors, malts, etc…

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NGAn Important Business

Activity– Can lead to the success or failure of a business

activity– Just think of the Movies and Music released this year

• Only some are hits, why?• Part of the reason for their success is marketing.

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NGThe Marketing Plan

• Profit making companies want to make profits• Charities want to raise money for their causes

• The first step in marketing anything is to determine a goal for the company or organization

• After identifying the goal a marketing plan can be developed

• A marketing plan consists of different parts referred to as the “Marketing Mix” (sometimes called the 7P’s )– Product– Price– Place– Promotion– People– Processes– Physical Environment.

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NGThe Product

• Refers to the item being sold by the business or organization

• Products– Snack foods– Automobiles– Sporting goods– Clothing

• Services– Postal services– Accounting services– Legal services– Services provided by trades people.

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NGProduct Marketing

StrategiesMethods used to improve/differentiate the product and increase sales or to target sales more effectively to gain a competitive advantage

• Design• Technology• Usefulness• Convenience• Value• Quality• Packaging• Branding• Accessories• Warranties.

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NGPrice

• Generally refers to the selling price for the goods or services

• Must cover– Raw materials– Salaries– Advertising – Other operating expenses– Profits

• Setting price is not easy– Set too high and consumers may not buy– Set too low and consumers may think it is cheap or poorly

made – If the price is too attractive, too many people will want the

good or service leading to a shortage to satisfy demand and therefore lost sales

– Takes a good deal of planning and thought.

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NGPrice Marketing Strategies

When pricing your products it is important to:• know your market• Know the price elasticity of the product• keep an eye on your rivals

Strategies include:• Price Skimming• Penetration Pricing• Psychological Pricing• Cost-Plus Pricing • Loss Leader Pricing.

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NGPlace

• Refers to the location where the companies goods or services are sold

• Should they be where the customers go?– Stores– Vending machines

• Should the salesperson go to the customer?– Door-to-door sales– Scalping tickets

• Place also refers to how the goods and services get from the supplier to the customer through “channels of distribution”– The use of computers and telecommunications equipment

have improved the channels of distribution.

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NGChannels of Distribution

Channel of Distribution Example

Producer to Consumer Buying corn at a road side stand from a farmer

Producer(Manufacturer) to Consumer A shoe company selling to consumers in a factory direct store (shoes)

Producer to Retailer to Consumer Farmer sells Produce to Independent Grocer who sells it to store shoppers

Producer(Manufacturer) to Wholesaler to Retailer to Consumer

Levis makes jeans, sells them to a wholesaler, who sells them to Sears who in turn sell them to the shopper

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NGPlace Marketing Strategies

The more places to buy the product and the easier it is made to buy it, the better for business

Place strategies include: •Retail •Wholesale •Mail Order•Internet•Direct Sales•Peer to Peer•Multi-channel.

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NGPromotion

Includes all the marketing activities that communicate the organizations’ message to the consumer about the goods and services being sold

The main promotional strategies include:– Special Offers– Personal selling– Advertising – Endorsements– User Trials – Leaflets/Posters– Free Gifts– Competitions– Direct Mailings.

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NGPeople

People represent the business:• The image they present is important• First contact with the customer is often human –lasting

first impression• Extent of the training and knowledge of the product is

important• Mission Statement – how relevant, and do employees

buy into it• Do staff represent the desired culture of the business?

People Marketing Strategies include:• Employees • Management• Culture• Customer service.

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NGProcesses

• Are especially relevant in the service industries• Deal with the processes people must go through to

acquire the service

• The Marketing Strategies deal with:• Contacts • Reminders• Registration• Subscription• Form Filling • Use of technology.

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NGPhysical Environment

The ambience, mood or physical presentation of the business environment is important to sell goods and services

•Marketing Strategies dealing with the physical environment deal with:•Appearance

– Trendy, retro, modern, old fashioned•Colours

– Light, dark, bright, subdued•Neatness and cleanliness•Music•Smell.

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NGA Companies Marketing

Mix Blend of the mix depends upon:• The Marketing Objectives• Type of Product• Target Market• Market Structure• Rivals’ Behaviour• Global Impact – culture, religion etc…• Marketing Position• Product Portfolio

– Product Lifecycle– Boston Matrix