DECA MARKETING PACKAGE
Basic Marketing Concepts
7 functions of marketing:
 Product/service management: assisting in the design of product
 Distribution: best method to allow customers to locate, obtain, and use products
 Selling: direct personal communication with prospective customers
 Marketing-information management: obtaining, managing, and using marketing
info
 Financing: budgeting for marketing activities
 Pricing: establishing the value of the product
 Promotion: advertising and other promotional methods to attract new customers
Functions of production:
 Raw materials
 Processing/manufacturing
 Services
Merchandising: offers products produced or manufactured by others for sale to
customers
Elements of the marketing concepts:
 Identify needs of customers - target market
 Develop and market products or services
 Operate a business profitably
Marketing mix: blending of four marketing elements - product, distribution or place,
price, and promotion
Marketing helps to match supply and demand
Consumer protection:
 Social responsibility: businesses need to be concerned about the consequences of
actions on others
 Consumerism: is the organized actions of groups of consumers seeking to
increase their influence on business practices
 Boycott: organized effort to influence a company by refusing to purchase its
products
Improving practices:
 Code of ethics
 Self-regulation
 Social action
Ethics are decisions and behaviour based on honest and fair standards
Buying motives:
 Emotional motives: reasons to purchase based on feelings, beliefs, or attitudes
 Rational motives: reasons to buy based on facts or logic
 Patronage motives: are based on loyalty
Types of decision-making:
 Routine decision-making: is used for purchases that are made frequently and do
not require much though
 Limited decision-making: takes more time than routine-decision making
 Extensive decision-making: occurs when the consumer methodically goes though all
five steps of the decision-making process - usually for expensive items
Market segment: is a group of individuals or organizations within a larger market that
share one or more important characteristics
Mass marketing: is aimed at a broad population of consumers rather than a narrow
segment
Geographic segmentation: refers to dividing consumers into markets based on where
they live
Demographics: refers to the descriptive characteristic of a market such as age, gender,
race, income and so on.
Psychographies: refers to people's interest and values
Market share is evaluated on the following criteria:
1. Number of potential customers
II. Interest in the product or service and the other mix elements III.
Money available to make the purchase
IV. Ability to communicate with consumers through the promotional mix
Market position: refers to the unique image of a product or service in a consumers mind
relative to similar competitive offerings
Can base your market position on the items listed below:
 Attribute: a specific characteristic that makes product unique
 Price and quality: what does the value of the product suggest
 Use or application: easy ... hard ... convenient
 Product user: association a personality or type of user with the product i.e. The
young generation portrayed by Pepsi products
 Product classification: what category does the product go under
 Competitor: is your product better than your competitors?
Basic Economic Concepts
Different types of economies:
 Controlled government: government attempts to own and control important
resources and make basic economic decisions
 Regulated economy: resources and decisions are shared between the government
and other groups or individuals
 Free economy: resources are owned by individuals rather than the government,
and decisions are made independently
 Mixed economy: some goods and services are provided by the government and
some by private enterprises
Demand: is a relationship between the quantity of a product consumers are willing and
able to purchase and the price
Supply: is a relationship between the quantity of a product that producers are willing and
able to provide and the price
Law of demand: when the price of a product is increased, less will be demanded
Law of supply: when the price of the product is increased, more will be produced because want to increase profits
Monopoly: is a type of market in which there is one supplier offering a unique product = no
competition
Oligopoly: is a type of market in which there are few suppliers offering a unique product
(less than 10)
Economic utility: is the amount of satisfaction a consumer receives from the
consumption of particular product or service
Basic Marketing Concepts
Stages in consumer decision-making:
 Recognizing a need
 Identifying alternatives
 Evaluating choices
 Making a decision
 Determining satisfaction
Steps in marketing research:
 Define the problem
 Analyze the situation
 Develop a data-collection procedure
Direct competition: is competition in a market segment with businesses that offer the
same type of product or service
Indirect competition: occurs when a business competes with a product that is outside its
product classification group. (i.e. The convenience of McDonald's vs. frozen dinners in the
grocery store)
Price competition: rivalry among firms based on price and value
Non-price competition: occurs when businesses decide to emphasize factors oftheir
marketing mix other than price
E-commerce: is the exchange of goods, services, information, or other business through
electronic means
Types of Internet promotion:
 Online advertising
 Web sponsorship: sponsor an informational web site such as Google
 Priority placement: some companies allow companies to pay to have their web
site appear at the top of the list when the results of a search are shown
 Customer information: some companies make a free web site on a topic that
interests their prospective customers
Target market: is a clearly identified segment of the market to which the company
wants to appeal
Types of convenience goods:
 Staple goods: routine purchases
 Impulse goods: purchase on the spur ofthe moment such as candy
 Emergency goods
Types of shopping goods;
 Attribute-based goods: different goods have different features
 Price-based gods: consumers are always looking for a bargain
Specialty goods: some products and services are extremely satisfying for consumers and
therefore will not bother to look for a substitute (i.e. Rolex watches) - strong brand loyalty
Unsought goods: goods and services that people do not want to buy (ex. Life insurance)
Product line: is a group of similar products with slight variations in the marketing mix to
satisfy different needs in a market
Promotion methods for services:
o Endorsements
 Word of mouth
 Personal selling
Steps in the purchasing process:
 Identify needs
 Determine alternatives: determine the types of products or services that will meet
businesses need
 Search for suppliers
 Select appropriate suppliers
 Negotiate a purchase
 Make a decision
 Evaluate
Physically inventory: a system used in accounting that determines the amount of a
product on hand by physically counting it
Perpetual inventory: a system used in accounting that determines the amount of a
product on hand by consistently maintaining records
Channel distribution: is made up of organizations and individuals who participate in the
movement and exchange of products and services from the producer to the final customer
Direct distribution: the producer sells the product to final customers
Indirect distribution: include other businesses, typically wholesalers and retailers
between the producer and the consumer
Wholesale clubs: are business that offer a variety of common consumer products for sale to
selected members through a warehouse outlet (i.e. Costco)
Limited-line stores: offer products from one category, such as apparel
Mixed merchandise stores: offer products from several different categories
Superstores: are very large stores that offer consumer wide choices of products such as
Wal-mart superstores
Mark-up: is an amount added to the cost of a product to determine the selling price
Markdown: is a reduction from the original selling price
One-price policy: all customers pay the same price
Flexible pricing policy: allows customers to negotiate the price within a price range
Price lines: are distinct categories within which products are organized based on
difference in price, quality, and features
Geographic pricing: companies set prices according to the location of the product
Zone pricing: different product or transportation costs are set for specific areas of the
sellers market
Publicity: a non-paid form of communication about a business or its products/services
Sale promotions: are activities or materials that offer consumer a direct incentive to buy a
good/service (i.e. Coupon, sweepstakes)
Visual merchandising: refers to point-of-sale displays
Promotional mix: is a blend of the promotional elements of advertising, personal selling,
publicity and sales promotion into a strategy for delivering a message to the target market
All About Advertising:
Organizational advertising: is designed to promote ideas, images, and issues associated
with a company or organization
Product advertising: is used by organizations to sell specific products
When selecting the type of media to use consider the following criteria's;
 Cost
 Reach
 Frequency
 Lead time: amount of time required to place the advertisement
Steps of the selling process:
 Approach the customer
 Determine their needs
 Demonstration: show them how the product works if possible
 Answer questions
 Closing: obtain a decision to purchase
 Suggestion selling: suggest other complimentary products
 Follow-up: continue contact to ensure satisfaction
Foreign production: a company owns and operates production facilities in another
country
Types of Risks
Natural risk: is caused by the unpredictability of nature, such as weather or earthquake
Human risk: arises because of the potential actions of individuals, groups, or
organizations
Economic risk: the uncertainty associated with market forces, economic trends, and
politics
Pure risks: present the chance of loss but no opportunity for gain
Speculative risks: if you have a chance to gain as well as lose from the risk
Controllable risks: can be reduced or even avoided by actions you take
Uncontrollable risks: if your actions do not affect the result of a risk
Insurable risks: if a risk is faced by a large number of people, and if the amount of the
loss can be pre-determined
Non-insurable risks: it is not possible to predict if a loss will occur or the amount of any
loss