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Chapter 1: What is Marketing?

1.1 Marketing Goods and Services

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The Tropicana Story �  From Grove to Glass

�  http://www.tropicana.com/#/trop_grovetoglass/grovetoglass.swf?grove_to_glass_video

Marketing Definition � Marketing is the sum of all activities

involved in the planning, pricing, promoting, distributing and selling of goods and services to satisfy consumers’ needs and wants.

�  Examples: Commercials, pamphlets, signs, print ads, radio ads, internet ads, flyers, billboards, posters.

Why is marketing so important to a business?

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�  Businesses cannot survive without marketing.

� Marketing connects suppliers with end users.

�  Customers need to know what a business sells and how they can obtain it.

…Any other reasons?

Goods and Services �  Object of marketing: the distribution of

goods and services.

�  Two categories of goods and services: industrial goods and consumer goods.

Goods and Services i) Industrial Goods

�  Also called business goods as they are products used in business to make other products or to assist operations.

�  Include: raw materials, processed goods or finished goods.

�  Examples: cotton, salt, milk (to make bread)

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Goods and Services i) Industrial Goods (continued)

� What is a raw material? � Mining companies, logging corporations,

farms, fishing boats, and oil rigs all market raw materials. � Example: a Nova Scotia fishery sells its

fish products to Purina to produce cat food, a Quebec mining company sells its copper to a wire manufacturer

Goods and Services i) Industrial Goods (continued)

� What is a raw material? (continued) � Usually marketed to businesses that

process them or use them in manufacturing.

� Some materials, like oranges or diamonds, are difficult to produce in Canada or can be more cheaply acquired elsewhere.

Goods and Services i) Industrial Goods (continued)

� What is a processed good? � Processing alters the nature of the raw

material. � Example: Trees into wood pulp, apples into

juice, milk into pasteurized milk. � Processed goods are sold as finished goods

or semi-finished goods. � Example: a flour mill sells its flour to a

bakery.

Goods and Services i) Industrial Goods (continued)

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� What is a processed good? (continued) � Rare for a company to process all the

items and ingredients necessary to manufacture its products (expensive, lack of resources, lack of training/personal).

Goods and Services i) Industrial Goods (continued)

� What is a finished good? � Products that no longer require processing. � Used by a business to help in operating the

business and in the production of other goods or services. � Example: Mazda must buy machinery, fan

belts, screws, tires, etc. from suppliers to make a car—and even things like cleaning supplies, computers, paper, a coffee machine, etc. to run its daily operations.

Goods and Services i) Industrial Goods (continued)

� What is a finished good? (continued) � Marketing finished goods requires little

advertising; emphasis is on building relationships with potential buyers and purchasing agents.

�  Industrial buyers look for small differences in price that will have a big impact on large orders. � Also look for quality, buying terms (i.e. is

there a discount?), shipping arrangements

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Goods and Services ii) Consumer Goods � Non industrial products intended for personal

use by the general public. �  Sold by retail stores. �  Can also be marketed to industrial buyers. � Example: baseball bat � If sold to an MLB team, it is an industrial

product. � If sold to a father for his son, it is a

consumer good.

Goods and Services iii) Industrial and Consumer Services

�  Services are activities performed for others.

�  The major difference between industrial services and consumers services is who pays for the service.

�  Example: Hilton Hotels – if a family books a room for a vacation, the service is consumer based; if a company books a room for an employee to stay in while attending a meeting, the service is industrial.

Work to Be Completed 1.  Select a local business. Describe at least

five industrial products that the business would use and a give a possible source for each of these products.

2.  Select a consumer product. Determine the supplies needed to make that product and how the end result would be accessible to consumers. (i.e. What industrial buyer would purchase the product to sell to consumers?)