Marketing CH. 4 Notes
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
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
From Problems to Opportunities
• Marketing used to be handled as a problemsolving 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
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
than what 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.
Marketing Concept
How Does the Marketing Concept Affect Planning?
Without the Marketing Concept
With the Marketing Concept
1.
Develop a Product
1.
1.
Decide on marketing activities
1.
Identify potential customers
Conduct research to identify potential
customers and their needs
2. Develop a marketing mix (4Ps) that meets
specific customer needs.
• 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
o This competition among products is very intense
• Identifying customer needs
 Successful companies are usually those that meet
customer needs
 But, meeting customer needs is not easy
1. Many customers are not sure of their needs, or have
conflicting needs
2. Customers have many needs, they typically have
limited amounts of money available
3. Needs of individuals and groups can be different
 Businesses tend to deal with customers in two ways
1. 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
2. Understanding customers is an important part of
business activities
• 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
• Consumers Decision Making
 Consumers make decision every day
 Decision is a choice among alternatives
o 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
• 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
• 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
• 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)
•
2. Limited Competition
 Some businesses have the advantage of having little or no direct
competition
 Ex- Known as a monopoly
•
2. 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
Open Ended Question
Recognize
Identify
Evaluate
Decision
Assess
Recognizes that a need
exists
Interested in finding a
solution
Cell phone battery will not
charge
Going to buy a new cell
phone, instead of getting
the old one fixed
Gathers information to Go to Verizon and look at
evaluate choices
available phones
Decision will be: select 1. Buy the phone
one of the available
2. Gather info
choices, to gather more 3. do nothing
information, or to do
I chose to buy phone
nothing
Consumer determines Do not buy the Verizon
whether or not the
Droid, it is cheaply made,
choice was correct
and breaks easily
• 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
• 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
• 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