Objective 3.01 Understand principles of marketing 1.

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

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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.

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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

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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.

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Classification of

Classification of

the main types

the main types

of promotionof promotion

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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.

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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.

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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

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