Essential Standard 3.00

Understand the role marketing in business.

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Objective 3.01

Understand principles of marketing.

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Topics • Functions of marketing • Importance of marketing research to the creation or improvement of products or services • Selling prices of products and services • Classification of channels of distribution • Classification of the main types of promotion 3

Functions of marketing 4

Functions of Marketing • What happens during the marketing process?

• Activities of marketing happen throughout the seven functions of marketing 5

Functions of Marketing continued Seven functions of marketing: – Product/service management – Distribution – Selling – Marketing-information management – Financing – Pricing – Promotion 6

Importance of marketing research to the creation or improvement of products or services 7

Marketing Research • What is marketing research?

• Steps in marketing research:  Define the marketing problem.  Study the situation.  Develop a data collection procedure.

 Gather and analyze information.

 Propose a solution.

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Marketing Research continued Types of research studies – Surveys – Focus groups – Observations – Experiment 9

Marketing Research continued Parts of a product – Basic product – Product features – Options – Brand name – Packaging – Warranty 10

Marketing Research continued Similarities of products and services • Meet the needs or satisfaction of a target market • Include a mix of the marketing elements (product, price, promotion, and distribution) 11

Marketing Research continued Differences between products and services

Products

Tangible Perishable Inseparable Easier to market More control over quality

Services

Intangible Non-perishable Separable More difficult to market Less control over quality 12

Selling prices of products and services 13

Selling Prices of Products and Services • What factors influence the pricing of products and services?

• Pricing formula Selling price=product costs+operating expenses+profit Example: $215=67+38+100 14

Selling Prices of Products and Services continued • Markup – The amount charged of the selling price to cover the operating expenses and profit usually stated as a percent.

– Selling price=product cost+markup – Example: $35+$14=$49 – $35*40%=$14 • Markdown A reduction from the original selling price. 15

Classification of channels of distribution 16

Classification of Channels of Distribution • What is channel of distribution?

• How do the needs between producers and consumers differ? They differ by: – Quantity – Assortment – Location – Timing 17

• • Classification of Channels of Distribution continued Channels of distribution allow businesses to adjust quantity and assortments accessible in convenient locations for customers and storage of products.

– Types of channels of distribution: Direct Example-UPS delivers packages for Ann Taylor. – Indirect Example-Tonya makes and sells drapes to local customers.

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Classification of the main types of promotion 19

Classification of the Main Types of Promotion • Effective communication consists of an understanding of information between the sender and the receiver.

• The sender selects a channel of communication and the receiver indicates understanding by providing some form of feedback.

• What is the relationship between effective communication and promotion?

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Classification of the Main Types of Promotion continued • Main types of promotion: – Personalized is customized for individual customer.

– Mass is communicated with many people with a common message.

• Some types of mass promotion: – Advertisement – Publicity – Public relations – Sales promotion 21