Marketing State Test Review What Is Marketing The

Marketing State Test Review

What Is Marketing? • The process of developing, promoting, and distributing products to satisfy customers’ needs and wants.

Seven Functions of Marketing • • Financing Pricing Promotion Product/service Management Distribution Selling Marketing-Information management

Marketing Concept • A business should strive to satisfy customers’ needs and wants with their ability and willingness to pay while generating a profit. o Customer focused o Repeat customers = profit

Marketing Mix (4 P’s) • Product o Goods, services, or ideas that have monetary value • Price o How much to charge to maximize profits • Place (Distribution) o Deciding where and to whom products need to be sold to reach the final users. • Promotion o Communicating with potential customers to inform, persuade, or remind them about a business’s products

Selling • Planned, personalized communication that influences purchasing decisions

Utility • Utility refers to the VALUE or USEFULNESS of a product or service

Types of Utility • FORM o Changing raw materials or putting parts together to make them more useful. • Trees …. . Pencils, paper • Flour, sugar, butter … Bread

• Place Utility o. Having a product WHERE customers can buy it • Stores, Catalogs, Internet

• Time Utility o. Having a product available at a certain time of year or a convenient time of day. • Shopping / Banking hours • Toys at Christmas • School supplies in August

• Possession Utility o The exchange of a product for some monetary value • Cash, Debit, Credit, Check, Financing plans etc. o Adds value to the product. Without options, some customers could not buy.

• Information Utility o. Communication with the consumer • Encourages sales through special offers, signs, ads, labels, manuals etc.

Product popularity…… • More competition o Marketers find ways to lower prices to remain competitive o Helps consumers to get the best product for the best prices

• Larger Quantities = Lower Prices o Lower per unit price = more sales = more $$ o LOWER PRICES and the CREATION of NEW and IMPROVED products are two additional benefits of marketing.

Fundamentals of Marketing Businesses must satisfy customers’ needs and wants in order to make a profit …. right products at the right price at the right time and in the right place….

• CUSTOMERS: o They BUY the products • CONSUMERS: o They actually USE the product • SONY…. . Sony’s customers are the retail stores that sell Sony products. The consumers buy Sony products from the retailer.

What is a market? • All potential customers who have the ability and willingness to buy a product o Video Game Market would be all people who purchase video games Target market… A very specific group of people that a business wants to reach.

Customer profiles…. • Information about where and how a person lives and what he/she wants and needs. o Age, Income level, Occupation o Ethnic groups – culture, history o Hispanic’s consider music a major part of their culture o 70% are Roman Catholic

Marketing mix “ 4 p’s of marketing” • Product • Price • Place • Promotion

Analyzing Markets Market segmentation is a way of analyzing a market by specific characteristics in order to create a target market

Separating larger groups into smaller groups based on certain characteristics • Demographics… o o Age Gender Income Ethnic Background

• Income o Disposable income – money left after taking out taxes o Discretionary income – money left after paying for basic living necessities such as food, shelter, and clothing

• Education • Ethnic Background o. U. S. Trend – The percentage of the Caucasian population is declining, while other ethnic populations increase. • Occupation

• Psychographic o Targeting consumers based on social and psychological characteristics o Lifestyles (outdoor enthusiasts, computer “geeks”) o Personalities o Trends – healthy eating, politics, Name brands • Geographic o Targeting based on where people live • Regional, National, Global

Product Benefits • Studying consumers’ needs and wants • Market benefits, not just the physical characteristics of a product

Supply and Demand determine prices and quantities of goods / services • SUPPLY: Amount of goods producers are willing to make and sell • DEMAND: Consumer willingness and ability to buy products

• SUPPLY greater than demand = o Surplus (Overstock. com, scooters) • DEMAND greater than supply = o Shortages (Superbowl tickets, Gasoline)

Four roles of government • Provider of Services o Ensure safety & general welfare of people • Police, military, fire, education • Supporter of Business o SBA (Small Business Assoc) o Loans

• Regulator (Making Laws to protect people and business) Consumer and Worker Protection: • OSHA: Occupational Safety & Health Admin o Workplace Safety • CPSC: Consumer Product & Safety Commission o Recalls defective products • FDA: Food and Drug Administration o Cosmetics and Food products

• Regulator cont. o Business Protection • (protects private property rights, patents, copyrights & trademarks) • SHERMAN ANTITRUST ACT o Prohibits monopolies • CLAYTON ACT o Prohibits price discrimination • FTC o Prohibits unfair competition (false advertising, deceptive business practices) • SECURITY & EXCHANGE COMMISSION o Responsible for regulating stocks and bonds sales

• Competitor o US Postal Service o Amtrak o National Parks

Ch 19 Sec 1 – Advertising Media What you’ll learn. . . • The concept and purpose of advertising • The different types of advertising media

Advertising and Its Purpose • Advertising is any paid form of nonpersonal promotion of ideas, goods, or services by an identified sponsor • Advertising is everywhere!

Two main types of advertising • Promotional advertising o Introduces new products and businesses o Encourages an interest in products o Explains product and service features • Institutional advertising o Attempts to create a favorable impression and goodwill for a business or an organization.

Types of Media are the agencies, means, or instruments used to convey advertising messages to the public. • • Print Media Broadcast Media Online Advertising Specialty Media

Print Media Written advertising that may be included in everything from newspaper and magazines to direct mail, signs and billboards. They are among the oldest and most effective types of advertising.

Newspaper Advertising • Local (Salt Lake Tribune) or National (USA Today) • Daily or weekly • Shopper o Little editorial content o Delivered free

Newspaper Advertising • Advantages o Large readership and a high level of reader involvement o Advertisers can target certain people o The cost is relatively low o Ads are timely • Disadvantages o Wasted circulation o Short life o Black and white (although many papers are changing to color format)

Magazine Advertising • Classified as o Local, regional, or national o Weeklies, monthlies, and quarterlies o Consumer or business (trade)

Magazine Advertising • Advantages o Can target audiences o Longer life span o Print quality is good o People keep magazines longer than newspapers o Offer a variety of presentation formats • Disadvantages o Less mass appeal within a geographical area o More expensive o Deadlines make them less timely

Direct-Mail Advertising • Sent by businesses directly through the mail • Includes newsletters, catalogs, coupons, samplers, price lists, circulars, invitations, postage-paid reply cards, and letters. • Mailing lists are assembled from current customer records or they may be purchased.

Direct-Mail Advertising • Advantages o Can be highly selective o Controlled timing o Can be used to actually make the sale • Disadvantages o o Low response level People think of it as “junk mail” Dated lists Cost is high

Directory Advertising • An alphabetical listing of households and businesses. • The best known are telephone directories.

Directory Advertising • Advantages o Relatively inexpensive o Can be used with all demographic groups o Are found in 98% of American households o Usually kept for at least a year • Disadvantage o Only printed once a year o Some service business’ are used infrequently; therefore, directory advertising must be combined with another type.

Outdoor Advertising • Standardized signs are available to local, regional, or national advertisers. • Purchased from outdoor advertising companies in standard sizes • Are placed in highly traveled roads, and freeways where there is high visibility. • Posters – pre-printed sheets put up like wallpaper on outdoor billboards. • Painted bulletins – painted billboards that are changed about every six months to a year. • Spectaculars – use lights or moving parts and are in high traffic areas.

A billboard gets right to the point

Which type of outdoor advertising is this?

Outdoor Advertising • Advantages o Highly visible and relatively inexpensive o 24 -hour a day message and located to reach specific target markets • Disadvantages o Becoming more restricted – increasingly regulated o Limited viewing time

Transit Advertising • Uses public transportation facilities • Commuter trains, taxis and buses, station posters near or in subways and in railroad, bus, and airline terminals

Transit Advertising • Advantages o Reaches a wide captive audience o Economical o Defined market • Disadvantages o Not available in smaller towns and cities o Subject to defacement

Broadcast Media • Includes radio and television • The average person will spend nearly ten years watching TV and almost six years listening to the radio over a 70 year lifetime.

Television Advertising • Communicates with sound, action, and color. • Prime time is between 8 and 11 p. m. • Is appealing to large companies with widespread distribution.

Got Milk ad Click the black rectangle to play the video

Television Advertising • Advantages o Can be directed to an audience with a specific interest o Message can be adapted to take advantages of holidays and special events • Disadvantages o Highest production cost of any media type o High dollar cost for the time used o Actual audience size is not assured – people leave the room or channel surf – effect of TIVO

adio Radio Advertising • Radio reaches 96 % of people over 12 yrs which makes it very effective • Best times are “drive times” – morning and late afternoon/early evening

Radio Advertising • Advantages o Can select an audience, such as teens by choosing the right station o More flexible than print – messages can be easily changed o It’s a mobile medium – can be taken just about anywhere • Disadvantages o Short life span – when broadcast, it is over o Lack of visual involvement

Online Advertising • Placing advertising messages on the Internet • Banner ads – created with rich media technology that uses the strategy of popping up and interrupting the readers search

Specialty Media • Relatively inexpensive, useful items with an advertisers name printed on them • Given away with no obligation attached • Calendars, magnets, pencils, memo pads, and key chains

Other Advertising Media • Businesses are constantly creating innovative means of transmitting their messages • Sports arena billboards, ads in movie theaters, hot air balloons and blimps, skywriting, etc.