Marketing CH. 4 Notes

1. Marketing CH. 4 Notes

2. The Basics of Marketing • Marketing today is different from marketing only a few years ago • It has expanded from a few activities to a variety • The earliest use of marketing was to move products from the producer to the consumer • Then promotion and sales were added to help persuade customers to buy • Today, businesses are able to complete a vast # of marketing activities ranging from research to customer credit

3. From Independence to Integrated • Has changed from an activity that was an independent part of business to one that is well integrated with other business functions • In the past, marketing was not well understood so they would often work by themselves • Now, it is integrated- meaning it is an essential part of the business • It is involved in all important business decisions, and strategies are developed as a part of the business plan

4. From Problems to Opportunities • Marketing used to be handled as a problem-solving tool, now it is a creation tool • Also, it is often called on when companies face problems • Today’s businesses can’t afford to wait until problems occur, so they are continuously looking for market opportunities • Ways to improve a companies offerings in current markets • It is responsible for identifying and planning opportunities

5. Putting Marketing Up Front • Successful businesses use carefully prepared • plans to guide their operations • The business will use a strategy for how it expects • to achieve its goals • To develop this strategy businesses should use the • marketing concept • By incorporating the marketing concept • companies attempt to develop products • and services that respond to customers’ needs rather • thanwhat the company thinks should be offered. • Marketing will be directed at meeting the identified • needs of the customers rather than developing ways • to persuade people to buy something they may not • need.

6. Marketing Concept

7. Understanding the customer • Customers have many choices of products • They often spend time comparing products and services before making decisions • Bringing a new product to the market is expensive, it take time and money to develop, produce, distribute, and promote • When it enters the market it must compete with other companies • This competition among products is very intense

8. Identifying customer needs • Successful companies are usually those that meet customer needs • But, meeting customer needs is not easy • Many customers are not sure of their needs, or have conflicting needs • Customers have many needs, they typically have limited amounts of money available • Needs of individuals and groups can be different • Businesses tend to deal with customers in two ways • Some businesses don’t view the specific needs of customers as important. They believe if they can effectively produce and market products customer will buy • Understanding customers is an important part of business activities

9. Satisfying Customer Needs • Businesses study markets to identify groups of consumers with unsatisfied needs • Through extensive marketing research, the business gather and analyzes consumer information • It categorizes customers according to similar characteristics, needs, and purchasing behavior • Groups of similar markets are known as market segments • After distinct market segments have been identified, a business will analyze each of them • It tries to determine which market segments can be served most effectively and which have the strongest need, the most resources, and the least competition • Once segments have been identified and prioritized, the business selects those segments on which it will focus its efforts

10. Consumers Decision Making • Consumers make decision every day • Decision is a choice among alternatives • Made to satisfy a need or to solve a problem • Consumers want to choose the alternatives that provide us the most satisfaction or the greatest value • If marketers want to satisfy customer needs, they must understand how consumers choose what they will buy • Different theories are made, but there is a general agreement that people follow a series of decision making when purchasing • These decisions become routine and simple when repeated

11. Stages of a Decision • Step 1.Recognize- Begins when a consumer recognizes that a need exists • If the need is urgent the process is quick • If not, then the consumer may take time before buying • Step 2. Identify- When the consumer becomes interested in finding a solution • Identifying products or services that relate to the need • Step 3. Evaluate- When the consumer gathers information and uses it to evaluate choices • An evaluation is done to see if any choice is better, more available, or more affordable • Step 4. Decide- When the consumer is comfortable with the evaluation, a decision is made • Decision will be to select one of the available choices, to gather more information, or to do nothing • Step 5.Assess- When the consumer determines whether or not the choice was correct • Evaluated to see if it satisfied the need • If it did the decision will likely be repeated the next time

12. Relying on Information • Marketers are creative. Creativity is needed to plan the marketing mix, develop new product features and uses, and prepare promotional materials and activities • Conducting research is an important marketing activity • Need to be skilled in organizing research and using results • Most important part of research is the study of potential and current customers • Additionally, the research about competitors will identify the type of competition and strengths and weaknesses of competing companies

13. Responding to Competition • 1. Intense Competition • Most difficulty type of competition businesses face is market in which businesses compete with others offering very similar products • Ex- Pure competition…many business offering the same product (Agricultural) • Limited Competition • Some businesses have the advantage of having little or no direct competition • Ex- Known as a monopoly • Monopolistic Competition • Most business face competition somewhere between intense and monopoly • They have many competitors, but customers see differences among choices • The customers determine which product fits there wants and needs

14. Open Ended Question

15. Producers and Manufacturers • They develop the products and services needed by other businesses and consumers • Because of that role, the product part element of the marketing mix receives the most attention’ • Distribution is also important to insure the product gets to the customers • Unless manufacturers and producers distribute products directly to the users, they must rely on other businesses to make good decisions about product distribution, prices, and promotion • Even if producers and manufacturers do not sell directly to final consumers, they still must understand and respond to customers needs

16. Channel Members • A channel of distribution is made up of all the businesses involved in completing marketing activities as products move from the producer to the consumer • Channel Members- are the businesses used to provide many of the marketing functions during the distribution process. • If the product does not meet the customers needs, the customers are likely to hold the channel member as responsible as the producer • After decisions are made about what products to offer, channel members then focus their attention on the other mix elements • Retailers are responsible for most final pricing decisions • They use promotion activities to encourage consumers to purchase their products

17. Service Businesses • Most service businesses work directly with customers rather than through a channel of distribution • Therefore they are responsible for the entire marketing mix • Product mix element is very important- they must develop procedures to insure quality service every time • Distribution is also important- because the service must be available where and when the customer wants it • Service businesses have more control over pricing • It is more difficult for customer to determine the appropriate price • Marketing by Non-Business organizations • It is not unusual today to see marketing used by museums, libraries, symphonies, athletic teams, churches, and clubs • Nonprofit organizations • Do not operate off of profit motive, however still need resources to provide the services • They often rely on fundraising • Must convince people of the value of their service, and the need to support the organization