Ch. 9
Marketing: Product and Price
Introduction to Marketing:
 To be a better informed consumer, you should know a little about
 Marketing goes beyond simply selling and advertising
Definition of Marketing:
Marketing is the process of: planning and executing the:
 Conception
 Pricing
 Promotion
 Distribution
of goods and services to facilitate exchange that satisfy individual and
organizational objective.
The Eight Functions of Marketing:
 The eight functions of marketing are all about:
Finding an unmet need in the market, and then providing that product or
service to customers.
 The Eight Functions are grouped under 3 categories:
I: Exchange which covers:
1- Buying: Consist of inventing and developing products to fit the
needs of the customers. The needs are determined through
market research.
2- Selling: It happens when customers are informed of a product.
Can be done through many methods:
 such as packaging
 advertising
II: Physical Distribution:
3- Transportation: It involves moving the products from the
factory to their selling point.
 Transportation is more complicated today because some factories
are located overseas, and because of the global business.
4- Storage: Some products need to be stored before being sold to
the customer, so storage space is needed, and the manufacturer
or the business owner should plan for thr cost of storage as well
as the cost of insurance in case of damage that might happen to
the goods.
III: Facilitating:
5- Quality and Quantity: The companies or manufacturers must
understand the quality standards of their product in order to
meet or exceed customer expectations.
 Also the companies must ensure the quantity of an item needed to
satisfy the consumer demand.
6- Financial: There needs to be methods and procedures for
payment to those who provided the product.
 Also the price the wholesalers and suppliers charge the retailer will
affect the pricing of the product to the customers.
7- Risk: In buying, transporting and selling there is some risk
which the markter should take into consideration such as:
- Consumers refusing to buy at price offered.
- Competitors offering product that are less expensive or higher in
8- Marketing information:
 There are many tasks that the marketing professionals should do
such as:
- Setting price.
- Determining how sales of the product or service will help companies
meet their financial objective.
- Reviewing market research.
- analyzing competitors marketing information.
According to the info the marketer gets from the changing markets, they
must be prepared to change the massage and the product or service
* Now that we know the big marketing picture, we want to determine
who are our customers?
Market Segmentation:
 The total potential Consumer market consists of over 6 billion
people in the global markets.
 Because consumer groups differ greatly in age, education, income,
and taste. A business usually can not fill the needs of every group.
We must first decide which groups to serve and then develop
products and services specially tailored to their needs.
 So success comes from studying the consumer market, breaking it
down into categories and then developing products for separate
groups of consumers.
Market Segmentation: is the process of dividing the total market into
several groups, whose members have similar characteristics.
Target market: is selecting which groups (i.e. market segments) an
organization can serve profitably.
 The main issue: is finding the right target market (i.e. the segment
that would be most profitable to serve) for the new venture.
Segmenting the Consumer market:
 There are Several ways to segment the consumer market such as.
1. geographical segmentation: which is dividing the market by
geographic area ( Cities, Countries, States, Regions and so on).
2. Demographic segmentation: Which is dividing the market by age,
income, education, religion, race, and profession.
 It is the most used segmentation variable, but not necessarily the
3. Psychographic segmentation: Which is dividing the market by
life style, values, attitudes, and interests.
4. Benefit segmentation: Which is dividing the market by benefits
that are preferred.
 Other things under benefits are: Convenience, durability, economy,
health, luxury, safety, statue.
5. Volume (usage) segmentation: Which is segmenting the market
by usage (Volume of production use)
 The best segmentation strategy: is to use all the variables possible
to come up with a Consumer profile ( a target market) that is :
- sizable,
reachable and
- profitable
This could mean on one hand not segmenting the market at all (i.e. going
after total market).
And on the other hand, it may mean going after smaller and smaller
Niche marketing: Targeting Smaller but profitable market segments and
designing or finding products and services for them
Relationship marketing: is moving away from mass production and
toward Custom made goods and Services.
* The goal of relationship marketing is to keep individual Customers over
time by offering them new products that exactly meet their requirements.
* The latest technology is helping the sellers to work with individual
buyers to determine their wants and needs.
e.g. Frequent-user programs used by airlines, rental car companies and
The 4Ps of marketing:
Marketing cannot occur without pleasing one's customers, because there
would be a business with out customers.
Marketing management: refers to the process of over seeing all the
aspects of marketing a particular product or service for the purpose of
attracting and retaining customers.
It includes 4 things:
1. Product
2. price
3. place
4. promotion
These 4 factors make up what is called the marketing mix
* We will discuss here only the Product:
Total Product Offer:
 The most important way to look at a product is by reviewing the
total product offer.
Total Product offer: implies that a customer is not only buying a
product or service but purchasing every thing that goes along with it,
Such as service after sale or brand name.
Total product offer: Consist of everything that Consumers evaluate when
deciding whether to purchase a good or service.
 So before buying any product you should look at the total product
offer which may consist of the value enhancers (see figure 9.5
 Some of the attributes are tangible (Such as the product itself and
its package) , whereas others are intangible (Such as reputation of
the producer, service, brand name).
 A successful marketer must begin to think like a consumer and
evaluate the total product offer as a collection of impressions
created by all the factors, and consider as a consumer what parts of
the total product offer are important.
 The total product offer consists of those things that are important to
customers sometimes far beyond the product itself.
 As a business person, it is wise to talk to consumers in order to sea
which features and benefits are most important to them, i.e. which
value enhancers to include in the final offering.
 Customers do not buy a product, but rather they buy the total
benefits of having or using the product.