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Chapter 8Intro to Business
Producing and Marketing goods and Services
Role of Marketing
1. Idea for development of a new product.2. Select product name3. Where products sold and how to get them
there. (Channels of Distribution)4. Set price and how people can pay for it.
1. (cash and carry/credit)
5. Customer service and product improvement after product is sold.:)
Marketing Functions1) Product/Service Planning-assists in design and
development by gathering information and testing ideas.
2) Purchasing-identify and obtain the products needed for marketing activities.
3) Financing-make sure financing and credit are available for purchase and sale of products.
4) Distribution-getting products to customers.5) Pricing-set prices and payment method.6) Risk Management-provides security and safety
for products and people and reduces business risk.7) Marketing Information Management-obtains
and organizes information needed to make marketing decisions.
8) Promotion-communicating with consumers to encourage purchase.:)
A Marketing Philosophy
The philosophy of business is known as the marketing concept , which considers the needs of customers when planning, pricing, distributing, and promoting a product or service.
– To be successful, the business must be able to:1) Identify customers they want to serve and
understand their needs.2) Develop a product that will satisfy the
customer and complete the necessary marketing activities.
3) Complete these activities at a profit.:)
A Marketing Strategy
Is a two step process that involves:1. Target Market-A clearly identified group of
consumers with needs that the business want to satisfy.
2. Marketing Mix-a combination of marketing elements designed to meet the needs of a target market.• The 4 P’s of Marketing:
1. Product-anything offered to the target market to satisfy their needs (products or services).
2. Place-locations where product sold convenient to customers.
3. Price-what customers are able to pay and method of payment.
4. Promotion-methods used to communicate information to customers in order to encourage purchase.:)
Six Steps of Product Development
Buying Motives-the reasons for making a purchase. (sometimes rational and logical, sometimes not):)
Getting Products and Services to Consumers
Channel of Distribution-is the path that a product travels from producer to consumer. Direct Channel of Distribution-from
producer to consumer. Indirect Channel of Distribution-goods
move through one or more middle firms between producer to consumer.
Wholesaler-a middle firm that assists with distribution activities between businesses.
Retailer-sells directly to consumer (may obtain goods from wholesaler or producer) collect products of many manufacturers and resells them. (Wal-Mart, Target, Meijers):)
QuickTime™ and aSorenson Video decompressorare needed to see this picture.
Characteristics of Effective Distribution
4 important differences to consider in developing an effective channel of distribution.1. Differences in Quantity-adjusts the large
quantity produced to the small quantity purchased.
2. Differences in Assortment-accumulate many varieties of products in one place.
3. Differences in Location-brings products from all over the world to convenient locations.
4. Differences in Time-having the right products at the right time.:)
The Role of Pricing
Objectives of Pricing-one of three goals1. Maximize Profits-“how?”2. Increase Sales-”how?”3. Maintain Image-”how?” (Kobe!)
Factors that will influence Price1. Quantity-Walmart????2. Customer Service Offered3. Fragile and requires special handling.4. Businesses in the channel of distribution-
direct vs. indirect.5. Amount of advertising and
Communications necessary to inform consumers.:)
The Role of Pricing
Promotional methods (3)1. Who are prospective customers being
targeted? How many and where?
2. What is the Message?3. What is the budget for promotion?