Chapter 1
Marketing Is All Around Us
Definition of Marketing
• The process of developing, promoting, and
distributing products to satisfy customers’ needs
and wants.
– Products: include goods and services, both of which
have monetary value and satisfy customers’ needs and
wants.
– Goods: kinds of things you can touch or hold in your
hand.
– Services: kinds of things you can’t physically touch.
(dry cleaners, amusement parks, movie theatres)
– Exchange: takes place every time something is sold in
the marketplace.
Think about all the ways that Marketing
affected you this morning…
• Breakfast-cereals
(different ingredients
and packaging)
• Shower: soap,
shampoo, toothpaste –
all created to meet
your needs. (Product
planning and
packaging)
• Check the newspaper or
internet for last nights
sports scores. It’s filled
with advertising and local
retail advertisement.
• Go to the mall (window
displays, price reductions).
• Greeted in the store by a
sales associate (selling).
• Trucks going to the mall
(distribution).
Four Foundations of Marketing
1.
2.
3.
4.
Business, Management, Entrepreneurship
Communication and Interpersonal Skills
Economics
Professional Development
Functions of Marketing (7)
• Distribution
• Product / Service
Management
• Financing
• Marketing Information • Promotion
Management
• Selling
• Pricing
Distribution
• Deciding where and to
whom products need to be
sold in order to reach the
final users.
• Methods of transportation:
– Truck, rail, ship, or air.
• Involves systems that
track products so they can
be located at any time.
Financing
• Getting the money that
is necessary to pay for
the operation of the
business.
• Involves decisions
about whether to offer
credit to customers.
Marketing Information
Management
• Getting necessary
information to make
sound business
decisions.
• Questionnaires, taste
tests, telemarketing.
• Creating surveys,
charts, finding
information to
improve a product.
Pricing
• Dictate how much to charge for goods and
services in order to maximize products.
– Pricing decisions are based on competitive
pricing and determining how much customers
are willing to pay.
Product/Service Management
• Obtaining, developing, maintaining, and
improving a product or a product mix in
response to market opportunities.
• This is where marketing research results are
decided.
Promotion
• Communicating with a
potential customer to
inform, persuade, or
remind them about a
business’s products.
–
–
–
–
Television
Radio commercials
Print(newspaper)
E-commerce (internet)
• Can be used to improve a
company’s image
(business donating to
charity).
Selling
• Provides customers
with goods and
services they want.
– Selling can happen:
• Retail
• Business-to-business
Economic Benefits of Marketing
• The functions of marketing add value to a
product.
– Utility: attribute of a product or service that
make it capable of satisfying consumers wants
and needs.
Five Economic Utlities
1. Form: changing raw materials or putting parts
together to make them more useful.
•
Trees can convert into lumber which makes furniture, paper,
etc.
2. Place Utility: having a product where customers
can buy it.
3. Time Utility: having a product available at a
certain time of year or convenient time of day.
(toys-Christmas season, convenient shopping
hours)
Utilities continued
4. Possession: exchange of a product for
some monetary value.
•
Cash, checks, credit cards, installments, layaway
plans.
5. Information: communication with the
consumer.
•
Displays, labels on food, advertising (where to
buy product)
Lower Prices
• When demand is high, manufactures can
make products in larger quantities (reduces
the unit cost of each product).
• Company can charge a lower price per unit,
sell more units, and make more money.
– Example:
Quantity Produced
10,000
200,000
Fixed Cost per Unit
$2.00
.10
New and Improved Products
• Increased competition is generated by marketing.
• Businesses continue to look for opportunities to
satisfy customer needs and wants.
– Examples:
• Computers – powerful, faster, more memory, smaller in size
• Laundry detergents – went from powder to liquid – packaging
has changed – easy to use measuring cups
Careers in Marketing/Facts
• Facts
– 33 million Americans
earn a living in
marketing
– Marketing activities
account for about 1 in
every 3 jobs in the U.S.
– Employment is
expected to increase by
33.3 percent
• Careers (page 15)
–
–
–
–
–
–
–
–
–
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Advertising
Customer service
E-commerce
Entrepreneur
Financial services
Real Estate
Sports marketing
Travel/Tourism
Hospitality
Restaurant Management