1.01A - Marketing Concept

Marketing – Definitions • The process of developing, promoting, pricing,

selling, and distributing products to satisfy customer’s wants and needs.

• All activities necessary to get a product from the manufacturer to the consumer.

• The creation and maintenance of satisfying exchange relationship.

• Dynamic activities that focus on the customer to generate a profitable exchange.

Marketing Activities

•SWOT analysis: The acronym for strengths, weaknesses, opportunities, and threats. A SWOT analysis reviews the potential for success or failure of a business or product.

Marketing Activities Cont. • SWOT• Internal - Businesses must continually

review internal strengths and weaknesses. For example, McDonalds introduced the fruit cup as an alternative to fries. After one month of its introduction, McDonalds evaluated the strengths and weaknesses of the product. Businesses are also looking at their staff, financials, 4 P’s and production

Marketing Activities Cont.• SWOT• External - Opportunities and threats are

external factors that will also affect operating the business. For example, staying abreast of what current products are offered by competitors. For example, when Coke introduced its new product, Vault, Pepsi suffered a decrease in sales for its existing product Mountain Dew. Businesses are also looking at environmental issues, political climate, cultural issues, and technology

Marketing Activities Cont. • Creating a Marketing Plan • Businesses use the functions of Marketing:

Pricing, Selling, Promotion, Distribution, Financing, Product/Service Management (PSM), & Marketing Information Management (MIM) to create a marketing plan for their business. This can be done for the whole company, divisions, and individual products.

Items that are Marketed

• Products - include both goods and services– Goods - Tangible items that satisfy customer’s needs and

wants. For example, television, car, cell phone, and clothing.– Services - Intangible items that satisfy customer’s needs and

wants. For example, admission to an amusement park, getting a haircut, seeing a movie, going to the doctor, or buying insurance.

• Ideas – Go Green, Cancer Awareness, Stop Smoking, Stay in School

• Organizations – Profit & Non-profit. Ex: Nike, Microsoft, Red Cross, and Victory Junction.

• People – politicians, movie stars, athletes

Wants vs. Needs

Wants: Not a necessity, a desire. For example, a sports car versus an economical car.

Needs: A necessity for living. For example, clothing, food, and shelter.

Where Does Marketing Take Place?

EVERYWHERE!!!!

Marketing Concept Definitions• The idea that a business should strive to satisfy

customers’ needs and wants while generating a profit for the firm. The focus is on the customer.

• An approach to business that says that the way to make a profit is to focus on customer satisfaction.

• Using the needs of the customers as the primary focus during the planning, production, distribution, and promotion of a good or service.

Customer vs. Consumer

• Consumer: The person who uses the product. For example, Carrie buys denture cream toothpaste for her grandmother to use. Her grandmother is the consumer for this product, while Carrie is the customer.

• Customer: The person who purchases the product. For example, Alyssa buys chicken and steak at the grocery store this week to cook for her family’s dinner. Alyssa will not eat the chicken or steak because she is a vegetarian. Alyssa’s family is the consumer, while Alyssa is the customer. In many cases, the customer is also the consumer. For example, Tracey purchases and uses Tide detergent.

Benefits of Marketing • New and improved products.

– Businesses create new products and improve existing products to maintain their current customers or attract new ones.

– Ex: Verizon has introduced their new Xperia Play phone by Sony Ericson as the worlds first Playstation certified phone. Verizon Xperia

• Lower prices.– Lower prices benefit customers while businesses

benefit by selling more product at the lower price. – Ex: Prices for e-readers, tablets, laptops, etc. they

were expensive and few sold. As prices dropped, more customers purchased them.

Benefits of Marketing Cont. • If Marketing did not exist

– Without Marketing society would remain a self-subsistence style of living.

– You have less competition which results in higher prices, less choices, less improvements on existing products, and less information is available.

• Marketing’s benefit to society– Societies benefits from Marketing through increased

competition, lower prices, larger variety of goods/services, and mass communication with information about products/services.

– Fueled with more information, better choices are made utilizing our scarce resources within businesses, governments, and households.

– There are foreign and domestic societies and both benefit from marketing activities.