Chapter 10 Review

Four Elements of the Marketing Mix

Product-Most Important

Distribution-How we get it from one place to the next

Price-Best price to make the best profit and to give the consumer the best value

Promotion-How do we get the word out to the consumer?

Consumer Decision Making Process

1. Recognize the need, If you do not know what you need there is no decision

2. Gather Information-Many consumers use the Internet for this step

3. Select and Evaluate alternatives

4. Make a purchase decision5. Evaluate the effectiveness

of the decision

Selling Price

Made up of all costs plus the profit we want to make

Product Costs + Operating Expense + profit = Selling Price

All costs associated with the product need to be determined before we determine the profit needed.Materials

Employee Building costs

Profit Selling Price

1.57 2.57 .89 5.25 10.28

108.00 67.00 .89 75.00 250.89

55.00 .89 25.00 What is this one? 80.89

2.75 12.55 1.25 15.00 31.27

Gross Margin

The difference between the selling price and the product costs

Gross margin is just the percentage of the selling price that is profit

Answers 65% 59% 28.4%

Selling Price

Materials Employee Profit Gross Margin

15.75 2.75 2.25 10.25 =10.25/15.75

22.50 3.75 5.50 13.25 =13.25/22.50

125.00 67.50 12.00 35.50 =35.50/125.00

Advertising PublicityCompany pays for itCompany controls its

contentCreativity is a factorWhen a customer sees it

they know someone is trying to sell them something

For a product that will make your teeth whiter, try…….

FreeThe writer/publisher

has the controlThe “news” is the

factorCan be bad or good

publicity

Today in the news, BP has a oil spill off the gulf of New Orleans…..

Advertising vs. Publicity