Producing and Marketing Goods and

ServicesChapter 8

The Role of Marketing• Marketing: is all the activities used to insure the effective exchange

of goods and services between businesses and consumers.

• Beginning the first idea for development of a new product or service.

• Determines the wants and needs of consumers and to test new ideas

• When a product is near completion , marketers select:

• Products name

• Design package

• Begin to develop advertising

• Next decisions are:

• Where the product will be sold

• How to get the products from place to place. (selling location)

The Role of Marketing• Final steps before sale:

• Help set the price

• Decide what forms of payments

• After products are sold:

• Provide customer service

• Work on product improvements

• When Marketers work well:• Customers get the products and services they want at an affordable price

• Business sell their product at a profit

• Leads to a satisfying exchanges between businesses and customers.

• What marketers are unsuccessful:• Sometimes products can not be sold at a profit

• Often customers have needs that can not find satisfactory products and services

The Role of Marketing

• Marketing is especially important in capitalistic of free enterprise economic systems.

• Based on voluntary exchange.

• Business are free to decide what they want to produce and sell

• Consumers are free to buy what they want and to choose a price they are willing to pay

• Without marketers it would be more:

• expensive and time consuming for business to sell what they produced

• Consumers would have a harder time finding what they need.

Marketing Functions

• Marketers perform countless number of activities

• Some work directly for a business that produces the goods and services

• Marketing researchers and sales people

• Some operate their own service businesses

• Advertising agencies and transportation companies

• Costumers perform marketing activities

• Ex: U-Haul (instead of paying for a delivery service you do it yourself by renting a trailer)

Marketing Functions

• Marketing Functions: (groups of marketing activities) must be completed for an exchange to occur:

• Product/Service Planning: assist in the design and development by gathering information and testing ideas.

• Purchasing: identifies and obtains the products (services) needed for marketing activities.

• Financing: makes sure financing and credit are available to support both the purchase and sale products.

• Distribution: involves getting products to customers.

• Pricing: sets prices and payment methods

• Risk Management: Provides security and safety for products and people, and reduces business risks

• Marketing Information Management: Obtains and organizes information needed to make marketing decision.

• Promotion: Involves communicating with consumers to encourage purchases.

Effective Marketing

• It was once believed Marketing was not important. All they needed to do was produce good products and the customer would find them and pay enough for the company to make a profit.

• Competition

• Gave customers choices that best met their needs.

• Business have realized today that they will be more successful if they understand and use marketing well.

• Marketing Philosophy

A Marketing Philosophy

• The most successful business think of the customer as they produce and market products and services.

• Marketing Concept: Considers the needs of costumers when planning, pricing, distributing, and promoting a product or service.

• Identify the customers they want to serve and understand their needs.

• Develop a product that will satisfy the customers and complete the necessary marketing activities effectively.

• Complete all of those activities at a profit.

• Think of your favorite restaurant or clothing store. What do they offer that keeps you coming back?

Marketing Strategy

• Marketing Strategy: Business people who believe in the marketing concept use a two-step process.

• First Step: Target Market: clearly identified group of consumers with needs that the business wants to satisfy.

• Second Step: Marketing Mix: is a combination of marketing elements designed to meet the needs of a target group. 4p’s of marketing

• Product: is anything offered to the target market to satisfy their needs, including both products and services

• Place: (distribution) includes the locations where the products are sold and the ways they are made available to customers.

• Price: Is what customers pay and the method of payment.

• Promotion: Is the methods used to communicate information to customers in order to encourage purchases and to increase satisfaction.

Effective Marketing

Product Development

• Planning, developing and testing new goods and services.

• Developing products and services that consumers want.

• Discovering the buying motives of the target market

Product Development

Planning distribution channels

•Getting goods and services from producer to consumers

• Channels of distribution

• Direct

• Indirect

•Wholesaler/Retailer

Planning distribution channels

• Characteristics of effective distribution.

• Differences in quantity

• Business usually produce enough for thousands of customers

• Difference in assortment

• Manufacturers tend to specialize in a limited line of products, customers usually want to buy from a single source.

• Differences in location

• Distribution brings products from all over the world to locations convenient for consumers

• Differences in time

• Effective distributors lets manufacturers maximize efficiency while delivering products to consumers when they want them.

Planning distribution channels

The role of pricing

• Goals objectives of pricing.

• Maximize profits

• Increase sales

• Maintain an image

• Factors that will influence a product’s price

• the quantity purchased by a customer

• the level of customer service offered

• whether the product is fragile or requires special handling.

• the number of businesses in the channel of distribution.

• The amount of advertising and communications needed to inform customers.

• The role of promotion.

• Selecting promotional methods and media.

• Who are the prospective customers being targeted? How many? Where are they located? What information sources do they use?

• What is the message? Does everyone need the same information? Is the message simple or complex? Should the information be repeated regularly?

• What is the budget for the promotion?

• Personal selling as a promotional activity.

• Effective personal selling follows these important steps: preapproach, approach, demonstration, questioning, close and follow-up.

Promotion for successful marketing