Marketing and the Marketing Mix An e-book for Entrepreneurship I 10th – 12th Grades
Table of Contents • Marketing • The Marketing Concept • The Marketing Mix • Product • Price • Place • Promotion • Let’s Review • Resources
Marketing What is it? It’s 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.
The Marketing Concept This is the philosophy that achieving organizational goals depends on determining the needs and wants of target markets and delivering the desired products/services more effectively and efficiently than competitors do.
The Marketing Mix The combination of the four strategies for product, price, place and promotion – the 4 Ps of marketing. These decisions make up a business’s marketing mix— strategies that work together to affect the marketplace. Check out “A New Look at the 4 Ps of Marketing” video Click Here The Marketing Mix Song Click Here
Product Considerations Challenge time! Before we discuss nine different product considerations, do this quick scatter game to see if you can define the four Ps!
Product Considerations • Choice of products • Product consistency is vital. • Do all of the products/services “fit together”?
Product Considerations • Packaging • Packaging choices affect the appearance and appeal of the product. • Packaging impacts on the display and storage of the product.
Product Considerations • Services to support products • Some products such as computers, appliances, vehicles, and many other “technical” products require special services to maintain customer satisfaction.
Product Considerations • Branding • National brands offer an established reputation and the manufacturer provides extensive promotion. • Private brands are sometimes difficult to establish and expensive to promote but yield higher profit margins for the seller and help promote customer loyalty. AmericanEagle StarBucks Nike Kraft
Product Considerations • A warranty provides assurance to the buyer that the product is as it is represented to be or that it will be as it is promised to be. • A certain level of performance is expected from all products; however, some products may not meet customer expectations. • What steps will the business take to “back up” the products and ensure customer satisfaction?
Product Considerations • Level of quality relates to customer perception of product value • If the customer perceives higher quality, a higher price will be accepted. • Interpretation of customer perceptions must be accurate to succeed with higher prices.
Product Considerations • Business image is the mental picture customers have of the business. How do you want customers to “view” your business? • Discount (Wal-Mart): Image is built on “low prices everyday.” • Popular-priced (Target, Marshall’s): Image is built on the concept of quality designer brand merchandise at lower prices. • Exclusive (Nordstrom’s): Image is built on the superiority of the products carried by the business. • Specialty (Victoria’s Secret): Image is built on the single brand or single type of merchandise carried.
Product Considerations Product research and development is necessary in order to remain competitive. An organization must consistently strive to improve products and services for customers and to keep up with trends, technology and customer spending patterns.
Product Considerations Positioning is the perceived standing of a business or product in the minds of its customers as compared to the competition.
Price Considerations Challenge time! Before we discuss three different price considerations, do this quick crossword puzzle on the nine product considerations!
Price Considerations • Price setting – What are your goals? • Price below the competition? • Ensure a 15% (or some other established rate) profit? • Just break even?
Price Considerations • Terms are the conditions of purchase and payment between suppliers and buyers • When does the bill have to be paid in full? • Who will pay shipping charges?
Price Considerations • Discounts – are reductions in the price of goods, which are sometimes negotiated • Seasonal discounts are given for buying products during the off-season. • Quantity discounts are for buying in large quantities. • Cash discounts may be allowed for paying the bill early.
Place Considerations • Channels of distribution • How do products get from manufacturer to customer?
Place Considerations • Specific stores • Is this product sold anywhere else? • Does this business have exclusive rights to distribute the product? • Some products, like Yankee Candles and Snow Babies, require retailers to sign a licensing agreement to distribute these items.
Place Considerations • Transportation – What carrier will you choose to move your products? Remember, the more people that touch the product between the manufacturer and the consumer, the higher the cost of the product will be to the final customer. • Common carrier: Provides transportation services for any business in its operating area for a fee. • Contract carrier: For-hire carriers that provide equipment and drivers for specific routes according to contracts between the carrier and the shipper. • Private carrier: Transports goods for an individual business. Equipment can be purchased or leased to meet the specific transportation needs of the business.
Promotion Considerations Challenge time! Before we discuss five different promotion considerations, do this quick crossword puzzle on the nine product considerations!
Promotion Considerations • Advertising - Non-personal promotional messages paid for by an identified sponsor utilizing media such as television, radio, magazines, newspapers, billboards, and direct mail.
Promotion Considerations • Personal Selling - Communication between a salesperson and a customer intended to influence the customer’s buying decision. • High labor cost is involved, thus it may be expensive. • Salespeople can be one of the most powerful promotional tools. Train them well and treat them well.
Promotion Considerations • Publicity - Information about a business or its products distributed through various media at no cost to the business and often not controlled by the business. • Publicity is free, but since it is often not within the control of the business it can “cost” the business in a variety of ways. • News articles as well as negative press coverage fall into the category of publicity.
Promotion Considerations • Public Relations - Activities designed to create a favorable image for the business, its products, or its policies. Sponsorship of a local charitable activity would be public relations.
Promotion Considerations • Sales Promotion - All promotional activities other than advertising, personal selling, publicity, and public relations designed to stimulate sales and sales effectiveness. Coupons, contests, rebates, displays, and other short-term incentives are considered sales promotion activities.
Let’s Review! • Read over The Marketing Mix and the 4Ps • Play this Marketing Mix memory game • Quizlet1 - Review using the flash cards, playing the scatter game and taking a test • Quizlet2 - Review using the flash cards, playing the scatter game and taking a test
Thanks to These Great Resources! • Quizlet • Microsoft ClipArt • NC Department of Public Instruction • The Free Dictionary • YouTube