1
CHAPTER
4
THE BASICS
OF MARKETING
4-1 Changes in Today’s Marketing
4-2 Planning a Marketing Strategy
4-3 Deciphering Consumers and
Competitors
4-4 The Varied Role of Marketing
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©VISA
Focus Questions:
 What do you think is meant
by the ad’s headline?
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©VISA
Focus Questions:
 What do you think is meant
by the ad’s headline?
 What role does Visa play in
helping businesses market
products and services to
customers?
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©VISA
Focus Questions:
 What do you think is meant
by the ad’s headline?
 What role does Visa play in
helping businesses market
products and services to
customers?
 How do credit and financial
services such as the ones
described in this ad make it
easier for businesses to
participate in international
commerce?
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4-1
CHANGES IN
TODAY’S MARKETING
GOALS
Explain how marketing today differs
from marketing in the past.
Show why understanding customers is
crucial to applying the marketing
concept.
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CHAPTER
4
•
•
THE BASICS
OF MARKETING
Newsline page 88
Marketing Matters page 90
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Marketing Has Changed
Marketing Experiences
Understanding the Differences
 From few to many
 From independence to integration
 From problems to opportunities
 From expense to investment
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Marketing Has Changed
Marketing Experiences
 Define Marketing
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Marketing Has Changed
Understanding the Differences
 From few to many
 From independence to integration
 From problems to opportunities
 From expense to investment
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Marketing Has Changed
Understanding the Differences
 From few to many
 Marketing has expanded in scope
 Began to move product from the producer to
consumer (distribution)
 Then evolved into promotion and sales
 Now, all 9 functions are used
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Marketing Has Changed
Understanding the Differences
 From independence to integration
 Marketers worked alone (Mr. Incredible)
 Planning for marketing was done after other business
planning was completed…after thought
 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
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Marketing Has Changed
Understanding the Differences
 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….inventory, competitors
 Today’s businesses can’t afford to wait until
problems occur, so they are continuously
looking for market opportunities
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Marketing Has Changed
Understanding the Differences
 From problems to opportunities
 Marketing Opportunities
 Ways to improve a companies offerings in current
markets
 It is responsible for identifying and planning
opportunities
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Marketing Has Changed
Understanding the Differences
 From expense to investment
 Old days Marketing was viewed as an
EXPENSE and was the first place to cut
 Today it is a critical investment because it is
responsible for matching a company’s offerings
with market needs.
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What Does Marketing Marketing
Mean to a Business?
Reliable Auto Service
Dee’s Designs
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Activity 1
Pinpointing Promotion page 92
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Activity 2
 Choose one U.S. Company that has been in
existence for at least 20 years such as
McDonalds. Locate old ads from the
company and compare those ads with
marketing ads the company uses today.
Create a presentation comparing the old vs
the new.
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4-2
PLANNING A
MARKETING STRATEGY
GOALS
Understand how the marketing concept
transforms business planning.
Explain the importance of market segments and market opportunity analysis.
Discuss how businesses develop the
right marketing mix.
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Putting Marketing Up Front
 Successful businesses use carefully prepared
plans to guide their operations
 Planning that identifies how a company
expects to achieve its goals is known as a
strategy.
 A business’s strategy provides the clearest
indication of whether that business
understands the marketing concept.
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Putting Marketing Up Front
How Does the Marketing Concept Affect Planning?
Without the Marketing Concept
With the Marketing Concept
•
• Conduct research to identify
potential customers and their needs
Develop a Product
• Decide on marketing activities
• Develop a marketing mix (4Ps)
that meets specific customer
needs.
• Identify potential customers
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Putting Marketing Up Front
 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.
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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
 This competition among products is very intense
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Understanding the Customer
Identifying customer needs
 Successful companies are usually those that meet
customer needs
 But, meeting customer needs is not easy
 Many customers are not sure of their needs, or
have conflicting needs
 Customers have many needs, they typically have
limited amounts of money available
 Needs of individuals and groups can be different
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Two Views of Consumers
Customers are all alike and can be
influenced to buy what a business
offers.
Customers are quite different and they
select products and services to meet
their unique needs.
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Understanding the Customer
 Businesses tend to deal with customers in
two ways
1. Some businesses don’t view the specific needs
of customers as important.


Business feel most consumers are similar in terms of
their needs and purchase behavior
They believe either consumers don’t understand their
own needs or business can influence consumer needs
with well-designed products, pricing and promotion.
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Understanding the Customer
 Businesses tend to deal with customers in
two ways
2. Understanding customers is an important part of
business activities
 Study needs and try to understand how consumers
evaluate products and services to make decisions about
what to purchase
 They feel they can better satisfy consumers if they can
develop products and services that respond to what the
consumer wants and expects
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Understanding the Customer
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
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Understanding the Customer
Satisfying customer needs
 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 needs, the most resources, and the
least competition
 Studying and prioritizing market segments to locate
the best potential based on demand and competition
is know as market opportunity analysis
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Understanding the Customer
Satisfying customer needs
 Once segments have been identified and
prioritized, the business selects those segments on
which it will focus its efforts
 The segments selected become the business’s
target market
 Target Market is clearly defined segment of the
market to which a business want to appeal
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Planning the Offering
The marketing mix
Creating the right mix
 Developing products
 Making distribution decisions
 Pricing products and services
 Planning promotion
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Combining Parts of
the Marketing Mix
Product that offers choices
Distribution that provides
convenience
Price that gives value
Promotion that aids
decision-making
Satisfied customers
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4-3
UNDERSTANDING
CONSUMERS AND COMPETITORS
GOALS
Detail the stages of consumer decision
making.
Understand how business can use the
marketing concept in various types of
competition.
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Consumer Decision Making
 Consumers make decision every day
 Decision is a choice among alternatives
 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
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Consumer Decision Making
 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
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Consumer Decision-Making Stages
Consumers make a series of decisions
when deciding on a purchase.
1.
2.
3.
4.
5.
Recognize a need
Identify alternatives
Evaluate choices
Make a decision
Assess satisfaction
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Consumer Decision Making
 The stages of a decision
1.
2.
3.
4.
5.
Recognize
Identify
Evaluate
Decide
Assess
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The Stages of a Decision
 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
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The Stages of a Decision
 Identify - When the consumer becomes
interested in finding a solution
 Identifying products or services that relate to the
need
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The Stages of a Decision
 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
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The Stages of a Decision
 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
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The Stages of a Decision
 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
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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
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Relying on Information
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
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Responding to Competition
Intense competition
Limited competition
Monopolistic competition
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Responding to Competition
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)
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Responding to Competition
Limited competition
 Some businesses have the advantage of
having little or no direct competition
 Ex- Known as a monopoly
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Responding to Competition
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
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4-4
THE VARIED
ROLE MARKETING
GOALS
Explain how the role of marketing differs
in various types of businesses.
Identify ways marketing is used by nonbusiness organizations.
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The Varied Uses of Marketing
Producers and manufacturers
Channel members
Service businesses
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The Varied Uses of Marketing
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
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The Varied Uses of Marketing
Producers and manufacturers
 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
 EX- Nike shoes, sold by Nike, but also sold by stores like Finish Line,
Champs, Sports Authority
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The Varied Uses of Marketing
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
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The Varied Uses of Marketing
Channel members
 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
MARKETING
Chapter
4
Channel of Distribution
Each is a
Channel
Member
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The Varied Uses of Marketing
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
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The Varied Uses of Marketing
Service businesses
 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
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Non-Business Organizations
 Primary focus is on something other than providing
products and service for a profit
 It is not unusual today to see marketing used by
museums, libraries, symphonies, athletic teams,
churches, and clubs
 Examples





Government agencies
Churches
Schools
Museums
Professional organizations
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Marketing By
Non-Business Organizations
Government agencies
Nonprofit organizations
Supporting non-business organizations
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Marketing By
Non-Business Organizations
Government agencies
 Most have the characteristics of a monopoly
 Citizens pay for firemen, policemen, garbage collection,
street repairs, and other taxes
 As a result they have no choice but to pay
 In the past these agencies did not know what was best and
how to provide it, they just set the price
 Now, they recognize the importance of providing quality
services and have information available in more convenient
ways, an example is:
 E-government-info available on web
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Marketing By
Non-Business Organizations
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
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