Chapter 8
Producing and Marketing Goods
and Services
Marketing
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Marketing – all of the activities used to insure the effective
exchange of goods and services between businesses and
consumers.
Marketers – the people and businesses who complete marketing
activities.
Marketers use research:
1. to determine the wants and needs of consumers
2. to test new ideas with consumers
Marketers select the product name, design packaging and begin
to develop advertising.
Marketers decide where the product will be sold, how to get the
products from the place they are produced to the selling location.
Marketers help set price and decide what forms of payment will
be accepted.
Marketing functions
Marketing functions – groups of marketing activities that must be
completed in order for an exchange to occur:
1. product/service planning – assists in design and development.
2. purchasing – identifies and obtains the products needed.
3. financing – have finances and credit available to support
purchase and sale of products
4. distribution – getting the product to the customers
5. pricing – setting prices and payment methods.
6. risk management – provides security and safety for products
and people, reduces risks
7. marketing information management – obtains or organizes
information to make marketing decisions.
8. promotion – involves communicating with consumers.
Impact of Marketing on Your Life – page
104
 Marketing increases our standard of
living by helping businesses understand
our needs so they can produce the
products and services we want.
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MARKET CONCEPT
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-- The philosophy of business -- most successful
businesses think of the consumer as they produce and
market products and services.
 Consider needs of customers when planning, pricing,
distributing, and promoting a product or service.
 To be successful, businesses must:
1. identify the customers they want to serve
2. develop a product to satisfy the customers and
complete necessary marketing activities.
3. complete all activities at a profit
A Marketing Strategy
2 step process for successfully planning
and marketing products and services
1. identify a target market
2. develop a marketing mix
 marketing mix: a combination of
marketing elements designed to meet
the needs of the target market
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4 Ps of Marketing
Product – anything offered to the target
market to satisfy needs
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Place – Distribution – includes locations
where products are sold and ways they are
made available.
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Price – what customers pay and method of
payment
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Promotion – methods used to
communicate information to customers to
encourage purchase and increase their
satisfaction
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Product Development
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Steps – page 106
1. Develop a new product idea
2. test the idea with prospective customers
3. construct a product model and test it
4. design production and marketing procedures
5. develop budgets and forecast sales
6. prepare for manufacturing
Planning, Developing and Testing New Goods and
Services
Developing products and services that consumers
want
Buying Motives
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– reasons for making a purchase
 Can
be rational based on facts or logic
 Can be emotional, based on feelings and
attitudes
Planning Distribution Channels
How do we get product to customers?
 Channel of Distribution – path that a product
travels from producer to consumer
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Direct channel of distribution – process through
which goods are bought by the consumer directly
from the producer
Indirect channel of distribution – process through
which goods move through one or more middle
firms between producer and the consumer
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Wholesaler -- middle firm that assists with
distribution activities between businesses
Retailer – a business firm that sells directly to
the consumer
Effective Distribution Characteristics (pages
109-110)
1. Differences in Quantity
2. Differences in Assortment
3. Differences in Location
4. Differences in Time
THE ROLE OF PRICING
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(page 110)
Price – what we pay for products and services
Goals and Objectives of Pricing
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GOALS
1. cover cost and make a profit
2. want a prices that consumers view as a good value
3. price that won’t put them at a competitive disadvantage
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OBJECTIVES
1. maximize profits
2. increase sales
3. maintain an image
Factors that influence prices
1.
2.
3.
4.
the quantity purchased
the level of customer service offered
product special handling or if its fragile
No. of businesses in channel of
distribution
5. amount of advertising needed
Promotion for Successful Marketing
Promotion -- the marketing tool
businesses use to communicate with
consumers to persuade them to
purchase its products
 The Role of Promotion
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Attract new customers
 Inform customers
 Persuade customers
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Reinforce the decisions
Remind them how it meets their needs
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Selecting Promotional Methods and Media
Media Advertising – information paid by
company to reach large audiences
Sales Promotions – coupons, contests,
and free samples
Publicity – appears in media, not paid for
by company
Personal Selling – direct, personnel
communication between salesperson and
customer
Steps in the Selling Process
Preapproach
Approach
Demonstration
Questioning
Close
Follow-Up
Figure 8-4 page 111
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Chapter 8 – Producing and Marketing Goods and Services