SO WHAT IS MARKETING?
Chapter 1
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To be a successful marketer, you need to
understand:
◦ Marketing skills
◦ Marketing core functions
◦ Basic tools of marketing
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Our goals for this section are to:
◦ Define marketing
◦ Understand the marketing concept
◦ List the seven marketing core functions

Goods: tangible items that have monetary
value and satisfy your needs and wants.
◦ Examples: cars, iPhone, toys, clothing

Services: intangible items or tasks performed
for a customer.
 Intangible: you cannot physically touch them.
◦ Examples: hair cut, massage, car wash, movie
theatre

Exchange: when something is bought and
sold in the marketplace.
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Marketing: the process of planning, pricing,
promoting, selling, and distributing ideas,
goods or services to create exchanges that
satisfy customers.

Marketing concept: the idea that a business
should strive to satisfy customers’ needs and
wants while generating profit. The focus is
on the customer.
◦ For a business to be successful, all 7 marketing
core functions need to support this concept.
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1)
2)
3)
4)
5)
6)
7)
Channel Management
Market Planning
Marketing Information Management
Pricing
Product/Service Management
Promotion
Selling

Channel management (or distribution): the
process of deciding how to get goods into
customers’ hands.

Market planning (financing): understanding
the concepts and strategies used to develop
and target specific marketing strategies to a
select audience.
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Marketing information management:
gathering, storing, and analyzing information
about customers, trends, and competing
products.

Pricing: making decisions that dictate how
much to charge for goods and services in
order to make a profit.
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Product/service management: obtaining,
developing, maintaining, and improving a
product or a product mix in response to
market opportunities.

Promotion: the effort to inform, persuade, or
remind potential customers about a business’
products or services.

Selling: provides customers with the goods
and services they want.

Our goals for this section were to:
◦ Define marketing
◦ Understand the marketing concept
◦ List the seven marketing core functions


Marketing supports competition and offers
benefits to consumers.
Our goals for the next section are to:
◦ Analyze the benefits of marketing
◦ Apply the concept of utility


Through the study of marketing, you will
realize how important it is and how much
marketing affects your life and the lives of
other consumers.
Marketing plays and important role in the
economy because it provides a means for
competition to take place.

The benefits of competition are:
◦ New and improved products
◦ Lower prices
◦ Added value and utility

The 7 core functions of marketing add VALUE
to a product.
◦ Expert economists call “added value” = utility
◦ Utilities: attributes of a product that make it
capable of satisfying consumers’ wants and needs.
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1)
2)
3)
4)
5)
Form
Place
Time
Possession
Information
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Form utility: involves changing
raw materials or putting parts
together to make them more
useful.
◦ Deals with making or producing products
◦ Involves making products that consumers need,
want, and value
◦ Example: zipper, thread, cloth put together = jacket
 A jacket is valuable to a consumer.
◦ Special features or ingredients in a product add
value (increase form utility).
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Place utility: having a product where
customers can buy the product.
◦ Examples: online, catalogs, retail stores
◦ Businesses study consumer shopping habits to
determine the most convenient and efficient
locations to sell products.
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Time utility: having a product available at a
certain time of year or a convenient time of
day.
◦ Examples: OPEN 24 HOURS, extended holiday hours
◦ Marketers increase the value (increase time utility)
of products by having them available when
consumers want them.
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Possession utility: the exchange of a product
for money.
◦ Possession utility is involved every time legal
ownership of a product changes hands.
◦ Retailers may accept cash, personal checks, debit,
or credit cards.
 Each of these options add value (increase possession
utility) to the product being purchased.
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Information utility: communication with the
consumer.
◦ Businesses can communicate with customers
through salespeople, displays, packaging, labeling,
Web sites, and advertising.
 Examples: frozen food label, owners manual.

Our goals for this section were to:
◦ Analyze the benefits of marketing
◦ Apply the concept of utility

Marketing plays and important role in the
economy because it provides a means for
competition to take place.

Our goals for the next section are to:
◦
◦
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◦
◦
Describe the concept of market
Differentiate consumer and industrial markets
Describe market share
Define target market
List the four components of the marketing mix
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Marketers know that their product or service
cannot appeal to everyone.
To do their job, they look for people who
might have an interest in or a need for their
product. These people often share similar
needs and wants.
All people who share similar needs and wants
and have the ability to purchase a given
product are called a market.
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A market can be described as a consumer
market or industrial market.
Consumer market: consists of consumers
who purchase goods and services for
personal use.
◦ Consumers want products that:
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Save them money
Make their lives easier
Improve their appearance
Create status in the community
Provide satisfaction
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Industrial market or business-to-business
(B-to-B) market: includes all businesses that
buy products for use in their operations.
◦ Businesses want products that:
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Improve profits
Improve productivity
Increase sales
Decrease expenses
Make their work more efficient
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A market is further described by the
total sales in a product category.
Market share: a company’s percentage of the
total sales volume generated by all
companies that compete in a given market.
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Businesses look for ways to offer their
product or service to the people who are
most likely to be interested.
You already know that a market can be
segmented into a consumer and industrial
market. Within those markets, you can break
it down even further.
Market segmentation: the process of breaking
down larger markets into even smaller groups
that have similar needs.

Target market: the group that is identified for
a specific marketing program.
◦ Target markets are important because all marketing
strategies are directed towards them.
◦ If a business does not identify a target market, its
marketing plan will have no focus.
Consumer
Market
Segment
1
Segment
2
Segment 3
Segment
1
Segment 3
TARGET
MARKET

A product may have more than one target
market.
◦ Example: Manufacturers of children’s cereal have
two target markets.
 1) Children (consumers): will be asking for the cereal
and eating the cereal.
 2) Parents (customers): will approving of and
purchasing the cereal.
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To develop a clear picture of their target
market, businesses create a customer profile.
Customer profile: lists information about the
target market such as:
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Age
Income level
Ethnic background
Occupation
Attitudes
Lifestyle
Geographic residence
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After a business has identified its target
market and created a customer profile, they
will develop the marketing mix.
The marketing mix includes four basic
marketing strategies called the four Ps:
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PRODUCT
PLACE
PRICE
PROMOTION
Product
Place
Marketing
Mix
Price
Promotion
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Product: choosing what products to
make and sell and the design of
products.
Product decisions include:
◦ Naming the product
◦ Deciding how to match the target
market’s needs
◦ Tropicana’s Trop50 brand has 50% less
sugar and calories and no artificial sweeteners.
◦ Made for a target market with a balanced living,
health conscious lifestyle.
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Place: the means of getting the product into
the consumer’s hands or deciding how and
where a product will be distributed.
◦ Knowing where one’s customers shop helps
marketers make the place decision.
◦ Trop50 has been available nationwide. The
Tropicana website has a store locator. Since most
people shop in supermarkets for orange juice, the
place decision was super easy.
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Price: pricing strategies
should reflect what
customers are willing
and able to pay.
◦ Pricing decisions take
into account prices that
the competition charges
for comparable products.
◦ To be competitive,
Tropicana priced its
Trop50 brand in line with
other premium orange
juices.

Promotion: activities
related to advertising,
personal selling, sales
promotion, and
publicity.
◦ Promotional strategies
deal with how potential
customers will be told
about a company’s
products, including the
message, the media
selected, special offers,
and the timing of the
promotional campaign.

Our goals for this section were to:
◦
◦
◦
◦
◦
Describe the concept of market
Differentiate consumer and industrial markets
Describe market share
Define target market
List the four components of the marketing mix
SO WHAT IS MARKETING?
Chapter 1