Understanding Marketing Processes Business Essentials 7 th Edition

What’s in It for Me? • Why does marketing matter to you? – By grasping this chapter’s presentation of marketing methods and ideas, you’ll benefit in two ways: • You’ll be better prepared to use marketing in your career as both employee and manager • You’ll be a more informed consumer with greater awareness of how businesses use marketing to gain your purchases © 2009 Pearson Education, Inc.

What Is Marketing? • Marketing – The Process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational objectives. • Providing Value and Satisfaction – Consumers buy products that offer the best value when it comes to meeting their needs and wants. – Finding a need and fulfilling it. © 2009 Pearson Education, Inc.

• Value Relative comparison of a product’s benefits with its costs. Benefits Value = ----------Cost • Value and Benefits – Value compares a product’s benefits with its costs. – Benefits include not only the functions of the product but also the emotional satisfaction associated with owning, experiencing, or possessing it. © 2009 Pearson Education, Inc.

• Utility Ability of a product to satisfy a human want or need. • Value and Utility – – Form utility Time utility Place utility Ownership utility

• Goods, Services, and Ideas – Consumer goods: products purchased by consumers for personal use. • Consumer marketing – Industrial goods: Products purchased by companies to produce other products. • Industrial marketing – Services: Intangible products, such as time, expertise, or an activity that can be purchased. • Service marketing • Relationship Marketing – Marketing strategy that emphasizes building lasting relationships with customers and suppliers. © 2009 Pearson Education, Inc.

THE MARKETING ENVIRONMENT • External Marketing environment consists of outside factors that influence marketing programs by posing opportunities or threats. The Marketing Environment – Political-legal environment – Sociocultural environment – Technological environment – Economic environment – Competitive environment • Substitute products • Brand competition • International competition © 2009 Pearson Education, Inc.

Substitute Product- Product that is dissimilar to those of competitors but that can fulfill the same need. Brand Competition- Competitive Marketing that appeals to consumer perceptions of similar products. International Competition- Competitive marketing of domestic products against foreign products. Marketing Manager- Manager who plans and implements the marketing activities that result in the transfer of products from product to consumer.

Marketing Plan • A detailed strategy for focusing marketing efforts on consumer needs and wants Marketing Mix The combination of product, pricing, promotion and distribution strategies used to market products. • Product – Differentiating a product • Pricing – Selecting the best price at which to sell a product • Place – Distributing a product through the proper channels • Promotion – Communicating information about a product © 2009 Pearson Education, Inc.

PRODUCT Good, service or idea that is marketed to fill consumer needs and wants. PRODUCT DIFFERENTIATION Creation of a product or product image that differs enough from existing products to attract consumers. PRICING Pricing a product is the process of selecting the best price at which to sell it. © 2009 Pearson Education, Inc.

PLACE (DISTRIBUTION) In the Marketing mix place refers to distribution. It is concerned with getting products from producers to consumers. PROMOTION The most highly visible component of the marketing mix is no doubt promotion. Which refers to techniques for communicating information about products. The most important promotional tools include: - Advertising - Personal Selling - Sales Promotion - Public Relations

ADVERTISING Advertising is any form of paid non personal communication used by an identified sponsor to persuade or inform potential buyers about a product. PERSONAL SELLING Personal selling refers to person-to-person sales. Many products for example, insurance, clothing and real estate are best promoted through personal selling.

SALES PROMOTION Relatively inexpensive items are often marketed through sales promotions, which involve onetime direct inducements to buyers. The sales promotions are meant to tempt consumers to buy products. PUBLIC RELATIONS Public relations includes all communication efforts directed at building goodwill. It seeks to build favorable attitudes toward the organization and its products.