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Transcript of ©2013 Cengage Learning. All Rights Reserved. Business Management, 13e ©2013 Cengage Learning. All...
©2013 Cengage Learning. All Rights Reserved.
Business Management, 13e
©2013 Cengage Learning. All Rights Reserved.
1
CHAPTER 19
WHAT IS MARKETING??
©2013 Cengage Learning. All Rights Reserved.
Business Management, 13e
Importance of Marketing
● Marketing—a set of activities that gets products from producers to consumers
● The role of the marketing manager
2
CHAPTER 20
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Business Management, 13e
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Nature of Marketing● Marketing activities
● Buying- obtaining product to be resold● Selling- providing info to customers to help them make a
purchase● Transporting-moving products from manufacturing site to where
customers will buy them● Storing- holding products until customer purchases● Financing- obtaining credit when buying end extending credit
when selling● Researching- studying buyer interests and needs● Risk taking- assuming risks of loss that may occur● Grading and valuing- grouping goods according to quality or size
and assessing price value
3
CHAPTER 20
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Business Management, 13e
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Nature of Marketing
● Cost of marketing- half or more of the price the consumer pays goes toward marketing costs
● Role of marketing- customer oriented; direct activities toward satisfying customers
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CHAPTER 20
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Business Management, 13e
Market Identification● Whom to serve- customer profile based on
characteristics such as age, income, gender, family status, etc.
● Where to serve- limit to certain geographic area based on climate, city, rural, etc.
● Identifying target markets- groups of people with similar needs to whom the company plans on selling their product(s)
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CHAPTER 20
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Business Management, 13e
The Marketing Mix-4 Ps
● Product● Price● Distribution (place)● Promotion
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CHAPTER 20
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Business Management, 13e
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ELEMENTS OF THE MARKETING MIX
● Product- can be defined as all attributes, both tangible and intangible, that customers received in exchange for the purchase price
©2013 Cengage Learning. All Rights Reserved.
Business Management, 13e
©2013 Cengage Learning. All Rights Reserved.© SOUTH-WESTERN EDUCATIONAL PUBLISHING
ELEMENTS OF THE MARKETING MIX
● Price- the amount of money given to acquire a product. The price must be high enough to cover the costs of producing and marketing the product.
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Business Management, 13e
©2013 Cengage Learning. All Rights Reserved.© SOUTH-WESTERN EDUCATIONAL PUBLISHING
ELEMENTS OF THE MARKETING MIX
● Place (Distribution)- the set of activities required to transport and store products and make them available to customers
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Business Management, 13e
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ELEMENTS OF THE MARKETING MIX
● Promotion- providing information to consumers that will assist them in making a decision to persuade them to purchase a product or service
● Advertising and personal selling
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Business Management, 13e
Developing a Marketing Plan
● Marketing plan—detailed written description of all marketing activities that a business must accomplish in order to sell its products; written for a specific time period, often one year
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CHAPTER 20
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Business Management, 13e
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12
CHAPTER 19
PRODUCT
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Business Management, 13e
The Product Life Cycle● Introduction stage- brand new product enters
market; sales low & profits low● Growth stage- other brands are available;
sales & profits are growing● Maturity stage- many competing brands that
are very similar; sales highest but profits drop● Decline stage- new product is introduced that
is better and customers begin to switch; sales & profits drop
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CHAPTER 20
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Business Management, 13e
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Product Life Cycle
14
CHAPTER 20
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Business Management, 13e
Product Categories● Industrial goods- designed for use by other
businesses● Consumer goods- designed for personal or
home use● Types of consumer products
● Convenience goods● Shopping goods● Specialty goods● Unsought goods
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CHAPTER 20
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Business Management, 13e
CHAPTER 20
16
Convenience Goods
● Inexpensive items that consumers purchase regularly without much thought
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Business Management, 13e
CHAPTER 20
17
Shopping Goods
● Products that consumers purchase less frequently; have higher price and require some buying thought.
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Business Management, 13e
CHAPTER 20
18
Specialty Goods
● Products that customers insist upon having and are willing to search for until they find them
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Business Management, 13e
CHAPTER 20
19
Unsought Goods
● Products that consumers do not shop for and for which they have no strong need; consumers typically don’t think about these products
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Business Management, 13e
Steps in Product Development
● Develop an idea for a new product that customers want to buy.
● Turn the idea into a workable product design.● Be able to produce the product and make it
available to consumers at a price they are willing to pay.
20
CHAPTER 19
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Business Management, 13e
Creating Product Ideas
● Consumer research (questionnaires, online research, consumer panels, etc.)
● Product research● Pure research- research done without a specific
product in mind● Applied research- solves existing product
problems or design improvements
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CHAPTER 19
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Business Management, 13e
Creating Product Ideas
● Designing new products● Engineers & researchers build models (prototypes)
of products● Product is tested● Resources to produce large quantities are located● Cost to produce is calculated● Selling price must cover all costs
22
CHAPTER 19
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Business Management, 13e
Product Design Levels
● Basic product● Enhanced product● Extended product
23
CHAPTER 21
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Business Management, 13e
Product Selection
● Product line● Product assortment● Packaging● Branding
24
CHAPTER 21
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Business Management, 13e
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Product Assortment Matrix
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CHAPTER 21
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Business Management, 13e
Producing the Product
● Different types of manufacturing processes-taking raw materials and converting to finished product● Mass production● Continuous processing● Repetitive production● Intermittent processing● Custom manufacturing
26
CHAPTER 19
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Business Management, 13e
Producing the Product
● Mass production-assembly process that produces large number of identical products (often uses assembly line)
● Continuous processing-raw materials constantly move through specially designed equipment to change their form
27
CHAPTER 19
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Business Management, 13e
Producing the Product● Repetitive production- same thing is done over
and over to produce a product; activity is usually simple and may be part of a module or assembly process
● Intermittent processing-short production runs to make predetermined quantities of different products
● Custom manufacturing- design and build unique products that meet specific needs of customers
28
CHAPTER 19
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Business Management, 13e
The Nature of Services
● How services differ from products● Form- intangible● Availability- must be available when & where
needed● Quality- cannot be separated from person or
business supplying the service● Timing- cannot be stored or held until needed
● Managing a service business
29
CHAPTER 19
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Business Management, 13e
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Differences Between Services and Products
SERVICES● Intangible● Available only from the
person providing them● Quality depends on the skill
of the provider and may vary from provider to provider
● Cannot be stored
PRODUCTS● Tangible● Available whenever the
purchaser wants them● Quality depends on
manufacturing process but should not vary significantly among batches
● Can be stored for later use
30
CHAPTER 19
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Business Management, 13e
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31
CHAPTER 19
PRICE
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Business Management, 13e
Planning a Business Purchase
● What to purchase● When to purchase● From whom to purchase● How much to purchase
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CHAPTER 22
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Business Management, 13e
Business Buying Processes
● New task purchase● Modified rebuy● Straight rebuy
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CHAPTER 22
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Business Management, 13e
Payment Terms and Discounts
● List price● Payment terms● Discounts● Trade discount● Quantity discount● Seasonal discount● Cash discount
34
CHAPTER 22
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Business Management, 13e
Components of Price
● Selling price● Cost of goods sold● Operating expenses● Margin or gross profit● Net profit● Markup● Markdown
35
CHAPTER 22
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Business Management, 13e
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Components of Selling Price
36
CHAPTER 22
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Business Management, 13e
Pricing Strategies
● Pricing to meet competition● Pricing to earn a specific profit● Profit based on consumer demand● Pricing to sell more products● Pricing to provide customer services
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CHAPTER 22
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Business Management, 13e
Controlling Costs
● Careful purchasing and operating decisions● Factors that can affect costs
● Markdowns● Damaged or stolen merchandise● Returned merchandise
38
CHAPTER 22
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Business Management, 13e
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39
CHAPTER 19
PLACE (DISTRIBUTION)
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Business Management, 13e
Locating the Business
● Availability of raw materials● Transportation methods● Supply and cost of energy and water● Land and building costs● Labor supply● Location of customers● Economic and legal factors
40
CHAPTER 19
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Business Management, 13e
Production Planning
● Production planning activities● Inventory management- quantities of materials
and supplies needed to produce product● Human resource planning-types of jobs, number
of people needed, skills needed● Production scheduling- steps required, time to
complete each step, sequence of steps● Building layout● Improving production processes
41
CHAPTER 19
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Business Management, 13e
Purposes of Distribution
● Economic discrepancies● Economic utility
● Time utility● Place utility
42
CHAPTER 21
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Business Management, 13e
Channels of Distribution
● Channel members● Types of distribution channels
● Direct distribution● Indirect distribution● Integrated marketing channels
43
CHAPTER 21
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Business Management, 13e
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Distribution Channels for Consumer Products
44
CHAPTER 21
© C
enga
ge L
earn
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2013
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©2013 Cengage Learning. All Rights Reserved.
Business Management, 13e
Selecting a Channel of Distribution
● Different types of consumers require different channels of distribution
● Factors to consider● Perishability of the product● Geographic distance between producer and consumer● Need for special handling of the product● Number of users● Number of types of products manufactured● Financial strength and interests of the producer
45
CHAPTER 21
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Business Management, 13e
Transportation Decisions
● Common transportation methods● Railways● Trucks● Piggyback service● Airplanes
● Other transportation methods● Waterways● Pipelines● Containerization
46
CHAPTER 21
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Business Management, 13e
Product Handling
● Tracking products● Bar codes
● Product storage● Warehouses● Distribution center
● Order processing
47
CHAPTER 21
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Business Management, 13e
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48
CHAPTER 19
PROMOTION
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Business Management, 13e
Promotion as Marketing Communication
● Promotional mix● Consumer decision-making process
● Problem recognition● Information search● Alternative evaluation● Purchase● Post-purchase evaluation
49
CHAPTER 22
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Business Management, 13e
Advertising
● Advertising purposes and media choices● Planning and managing advertising
● Advertising budget● Timing of advertising● Advertising evaluation
50
CHAPTER 22
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Business Management, 13e
Advertising Purposes
● To inform and educate consumers● To introduce a product or business● To announce improvement or product change● To reinforce features and benefits● To increase frequency of use● To increase variety of uses● To convince people to enter a store● To develop a list of prospects● To make a brand, trademark, or slogan familiar● To improve the image of a company or product● To gain support for ideas or causes
51
CHAPTER 22
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Business Management, 13e
Types of Advertising Media
● Publication advertising● Mass media advertising● Outdoor advertising● Direct advertising● Display advertising● Internet advertising
52
CHAPTER 22
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Business Management, 13e
Truth in Advertising and Selling
● False advertising● Full disclosure● Substantiation● Penalties for violations
● Case-and-desist order● Corrective advertising● Fines
53
CHAPTER 22
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Business Management, 13e
Personal Selling
● Studying the wants of customers (buying motives)
● Presenting and demonstrating the product● Answering customer questions● Closing the sale● Follow-up
54
CHAPTER 22
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Business Management, 13e
Sales Promotions
● Coupons● Promotional material● Samples● Demonstration● Displays
● Self-service merchandising
55
CHAPTER 22