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Reference Guide

Introductory Marketing - Reference Guides

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Department
Business Administration
Course Code
BUS 343
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2Introductory Marketing 3Introductory Marketing
WHAT IS MARKETING? cont.
ETHICAL MARKETING
Emphasis in Marketing Management in the 2000’s
has shifted from an emphasis on producers’ interests
to consumer interests. However, despite this focus on
the consumer, organizations must consider the social
and environmental implications of their decisions
TARGET MARKETS
A target market is a group of people with similar
needs and who are expected to respond similarly to
a marketing action
Target Markets evolve from the process of market
segmentation
MARKETING MIX
The Marketing Mix Is a combination of the
4 P’s of Product, Price, Place and
Promotion
Product – The product or service
offering including packaging,
warranty, after sale service, branding,
company image and value
Price What the customer pays to
obtain the product or service; the price
is established in relation to production
costs and competition
Place – Channels of distribution that
ensure the product or service is
available when and where
customers want it
Promotion – The variety of
communication tools that are
integrated together to ensure
the consumer is aware of the
product or service and
ultimately persuades them to
take ownership
PRODUCTS
CONSUMER GOODS
Goods purchased by the ultimate consumer
Types of Consumer Goods:
Convenience goods bought often with little
thought or effort. Consumer generally knows the
product before purchasing. Must be widely available
Shopping Goods products bought less frequently
which the consumer will comparison shop for. The
consumer looks for suitability, quality, price and style
Specialty Goods consumer has a strong brand
preference and seeks the brand when shopping
Unsought Goods products that the consumer
does not yet know about or knows about but does
not initially want
BUSINESS GOODS
Goods and services used in the production of other
goods. Their key characteristic is derived demand
(demand for the organizations product is driven by
demand for consumer products)
Types of Business Goods:
Raw Materials – unprocessed
materials that are used to
make other products
Component Parts and
Materials – partially finished
materials or completely
finished materials that are
used in the manufacturing of
other products
Accessory Equipment products which are used
to assist in the manufacture of goods but are not
used in the goods such as computers or office
furniture
Installations expensive major capital equipment
required to manufacture other products but not in
the actual product
PRODUCT LIFE CYCLE
The stages the product goes through in the marketplace
PACKAGING
The container on which product label information is
included
Functions of the Package:
• To contain and protect contents
• Promote products – communicate usage directions
and reinforce positioning
• Aid in storage and usage
• Facilitate recycling and reducing environmental
damage
SERVICES
Services are intangible activities offered to the
consumer in exchange for money
THE UNIQUE ASPECTS OF SERVICES:
Intangibility – they cannot be held, touched or seen
before the purchase. A key service strategy is to
tangiblize the service through branding or imagery
Inconsistency – because services are often
delivered by people it is hard to maintain service
quality at a consistent level. A key strategy has
been standardization through automation
Inseparability services are produced and
consumed at the same time and often the service
provider and the service cannot be separated by
the consumer when evaluating the service
Inventory because the service is produced and
consumed at the same time by a service provider
it is very important to
manage demand.
You cannot
inventory a
service
PRICE
• Money or other things are given up in exchange
for a good or service
• Price is often an indicator of value when it is
compared with the benefits of the product
• Price has a direct effect on firm’s profits
Profit = (Unit Price X Quantity Sold) – Total Cost
PRICING OBJECTIVES
Should fit with the marketing objectives
They affect the pricing policies established by the firm
Sales Objectives price to sell to generate sales
and market share
Profit Objectives price to generate the desired
profit – target return or return on investment
Status Quo Objectives – price to maintain
harmony in the competitive environment
New: Social Responsibility Objectives – price such
that the firm compromises profit to ensure the
betterment of the target consumer
APPROACHES TO SETTING A PRICE LEVEL
Demand Approach
For new products
Skim high entry level price
Penetrate low entry level price
For established products
Prestige – high price to reinforce prestigious
positioning
Odd even the use of .99 at the end of the price
Price lining – a line of products priced at various levels
Target – price based on what it is assumed the
consumer will pay
Bundle two or more products priced together as
a single package
Competition Approach
Customary – pricing at a level that is the norm
for the industry
Above, at or below the market subjective
pricing relative to competition
Loss leader – a low price to lure consumers in the
hopes of up-selling them
Cost Approach
Mark up a percentage mark up on price to
cover expenses
Cost plus the price reflects the sum of all costs
plus a set profit per unit
Experience curve pricing is variable in that as
experience is gained and costs fall so does the price
Profit Approach
Target profit the price is set to achieve a
particular profit target
Target return on sales the price is set to
achieve a return on sales target
Target return on investment the price is set to achieve
a target return on the investment in the product
Once the list price has been established there are a
variety of pricing adjustments that can be made to
enhance the competitiveness and success of the
pricing strategy
Discounts and Allowances – reductions from list
by the seller to buyer as a reward for some
activity the buyer performed
Geographic adjustments reductions or
adjustments made by the manufacturer and
wholesalers to reflect the cost of transportation
Price legalities
There are regulatory and legal restrictions
as determined by the
Competition Act that
must be considered
when establishing the
final price
The practices receiving
the most scrutiny are:
• Price fixing
• Price discrimination
• Deceptive pricing
• Predatory pricing
WHAT IS MARKETING?
Marketing includes activities that deliver “value “ to customers
by identifying customer needs and creating activities that
manage the organization’s relationships with those customers
WHO MARKETS?
Everyone markets: firms market their products or services,
non-profit organizations use marketing to attract clients and
donations, individuals market themselves to gain employment.
The list is endless
EVOLUTION OF MARKETING
Marketing is a social process that is a major force in a modern
global economy
Four Distinct Stages in the Evolution of Marketing
Production Era only one choice so those who could afford it
bought it. Produce all you can
Sales Era competition created choice so business emphasis
was on aggressive selling
Marketing Concept Era ‘an organization strives to satisfy the
needs of the customer while making a profit’
is the driving force as companies focus on
the customer
Marketing Orientation Era
today businesses focus on collecting
consumer information on a
continuous basis, sharing this
information throughout the
organization and using the
information to create value,
customer satisfaction and
customer relationships
© 2009-2012 Mindsource Technologies Inc. © 2009-2012 Mindsource Technologies Inc.© 2009-2012 Mindsource Technologies Inc.
Marketing is an organizational
function and a set of processes
for creating, communicating and delivering
value to customers and for managing
customer relationships in ways that benefit
the organization and its stakeholders.
source: http://www.marketingpower.com
This Permachart provides a synopsis of
key Marketing terms and concepts that
together may be used as a quick and
easy to follow reference and study tool
MARKETING
INTRODUCTORY
www.permacharts.com
Product Place
Price Promotion
Production
Era
Sales
Era
Marketing
Concept Era
Market
Orientation
Era
1860 1880 1900 1920 1940 1960 1980 2000
Time
TM
permacharts
2Introductory Marketing 3Introductory Marketing
WHAT IS MARKETING? cont.
ETHICAL MARKETING
Emphasis in Marketing Management in the 2000’s
has shifted from an emphasis on producers’ interests
to consumer interests. However, despite this focus on
the consumer, organizations must consider the social
and environmental implications of their decisions
TARGET MARKETS
A target market is a group of people with similar
needs and who are expected to respond similarly to
a marketing action
Target Markets evolve from the process of market
segmentation
MARKETING MIX
The Marketing Mix Is a combination of the
4 P’s of Product, Price, Place and
Promotion
Product – The product or service
offering including packaging,
warranty, after sale service, branding,
company image and value
Price What the customer pays to
obtain the product or service; the price
is established in relation to production
costs and competition
Place – Channels of distribution that
ensure the product or service is
available when and where
customers want it
Promotion – The variety of
communication tools that are
integrated together to ensure
the consumer is aware of the
product or service and
ultimately persuades them to
take ownership
PRODUCTS
CONSUMER GOODS
Goods purchased by the ultimate consumer
Types of Consumer Goods:
Convenience goods bought often with little
thought or effort. Consumer generally knows the
product before purchasing. Must be widely available
Shopping Goods products bought less frequently
which the consumer will comparison shop for. The
consumer looks for suitability, quality, price and style
Specialty Goods consumer has a strong brand
preference and seeks the brand when shopping
Unsought Goods products that the consumer
does not yet know about or knows about but does
not initially want
BUSINESS GOODS
Goods and services used in the production of other
goods. Their key characteristic is derived demand
(demand for the organizations product is driven by
demand for consumer products)
Types of Business Goods:
Raw Materials – unprocessed
materials that are used to
make other products
Component Parts and
Materials – partially finished
materials or completely
finished materials that are
used in the manufacturing of
other products
Accessory Equipment products which are used
to assist in the manufacture of goods but are not
used in the goods such as computers or office
furniture
Installations expensive major capital equipment
required to manufacture other products but not in
the actual product
PRODUCT LIFE CYCLE
The stages the product goes through in the marketplace
PACKAGING
The container on which product label information is
included
Functions of the Package:
• To contain and protect contents
• Promote products – communicate usage directions
and reinforce positioning
• Aid in storage and usage
• Facilitate recycling and reducing environmental
damage
SERVICES
Services are intangible activities offered to the
consumer in exchange for money
THE UNIQUE ASPECTS OF SERVICES:
Intangibility – they cannot be held, touched or seen
before the purchase. A key service strategy is to
tangiblize the service through branding or imagery
Inconsistency – because services are often
delivered by people it is hard to maintain service
quality at a consistent level. A key strategy has
been standardization through automation
Inseparability services are produced and
consumed at the same time and often the service
provider and the service cannot be separated by
the consumer when evaluating the service
Inventory because the service is produced and
consumed at the same time by a service provider
it is very important to
manage demand.
You cannot
inventory a
service
PRICE
• Money or other things are given up in exchange
for a good or service
• Price is often an indicator of value when it is
compared with the benefits of the product
• Price has a direct effect on firm’s profits
Profit = (Unit Price X Quantity Sold) – Total Cost
PRICING OBJECTIVES
Should fit with the marketing objectives
They affect the pricing policies established by the firm
Sales Objectives price to sell to generate sales
and market share
Profit Objectives price to generate the desired
profit – target return or return on investment
Status Quo Objectives – price to maintain
harmony in the competitive environment
New: Social Responsibility Objectives – price such
that the firm compromises profit to ensure the
betterment of the target consumer
APPROACHES TO SETTING A PRICE LEVEL
Demand Approach
For new products
Skim high entry level price
Penetrate low entry level price
For established products
Prestige – high price to reinforce prestigious
positioning
Odd even the use of .99 at the end of the price
Price lining – a line of products priced at various levels
Target – price based on what it is assumed the
consumer will pay
Bundle two or more products priced together as
a single package
Competition Approach
Customary – pricing at a level that is the norm
for the industry
Above, at or below the market subjective
pricing relative to competition
Loss leader – a low price to lure consumers in the
hopes of up-selling them
Cost Approach
Mark up a percentage mark up on price to
cover expenses
Cost plus the price reflects the sum of all costs
plus a set profit per unit
Experience curve pricing is variable in that as
experience is gained and costs fall so does the price
Profit Approach
Target profit the price is set to achieve a
particular profit target
Target return on sales the price is set to
achieve a return on sales target
Target return on investment the price is set to achieve
a target return on the investment in the product
Once the list price has been established there are a
variety of pricing adjustments that can be made to
enhance the competitiveness and success of the
pricing strategy
Discounts and Allowances – reductions from list
by the seller to buyer as a reward for some
activity the buyer performed
Geographic adjustments reductions or
adjustments made by the manufacturer and
wholesalers to reflect the cost of transportation
Price legalities
There are regulatory and legal restrictions
as determined by the
Competition Act that
must be considered
when establishing the
final price
The practices receiving
the most scrutiny are:
• Price fixing
• Price discrimination
• Deceptive pricing
• Predatory pricing
WHAT IS MARKETING?
Marketing includes activities that deliver “value “ to customers
by identifying customer needs and creating activities that
manage the organization’s relationships with those customers
WHO MARKETS?
Everyone markets: firms market their products or services,
non-profit organizations use marketing to attract clients and
donations, individuals market themselves to gain employment.
The list is endless
EVOLUTION OF MARKETING
Marketing is a social process that is a major force in a modern
global economy
Four Distinct Stages in the Evolution of Marketing
Production Era only one choice so those who could afford it
bought it. Produce all you can
Sales Era competition created choice so business emphasis
was on aggressive selling
Marketing Concept Era ‘an organization strives to satisfy the
needs of the customer while making a profit’
is the driving force as companies focus on
the customer
Marketing Orientation Era
today businesses focus on collecting
consumer information on a
continuous basis, sharing this
information throughout the
organization and using the
information to create value,
customer satisfaction and
customer relationships
© 2009-2012 Mindsource Technologies Inc. © 2009-2012 Mindsource Technologies Inc.© 2009-2012 Mindsource Technologies Inc.
Marketing is an organizational
function and a set of processes
for creating, communicating and delivering
value to customers and for managing
customer relationships in ways that benefit
the organization and its stakeholders.
source: http://www.marketingpower.com
This Permachart provides a synopsis of
key Marketing terms and concepts that
together may be used as a quick and
easy to follow reference and study tool
MARKETING
INTRODUCTORY
www.permacharts.com
Product Place
Price Promotion
Production
Era
Sales
Era
Marketing
Concept Era
Market
Orientation
Era
1860 1880 1900 1920 1940 1960 1980 2000
Time
TM
permacharts

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Description
Introductory Marketing 2 Introductory Marketing 3 permacharts TM WHAT IS MARKETING? cont. SERVICES INTRODUCTORY ETHICAL MARKETING TARGET MARKETS Services are intangible activities offered to the • Inseparability – services are produced and Emphasis in Marketing Management in the 2000’s A target market is a group of people with similar consumer in exchange for money consumed at the same time and often the service provider and the service cannot be separated by has shifted from an emphasis on producers’ interests needs and who are expected to respond similarly to THE UNIQUE ASPECTS OF SERVICES: to consumer interests. However, despite this focus on a marketing action the consumer when evaluating the service MARKETING the consumer, organizations must consider the social • Intangibility – they cannot be held, touched or se• Inventory – because the service is produced and Target Markets evolve from the process of market before the purchase. A key service strategy is to WHAT IS MARKETING? and environmental implications of their decisions segmentation tangiblize the service through branding or imagery consumed at the same time by a service provider it is very important to • Inconsistency – because services are often manage demand. arketing is an organizational M arketing includes activities that deliver “value “ to customers MARKETING MIX delivered by people it is hard to maintain service M function and a set of processes by identifying customer needs and creating activities that You cannot quality at a consistent level. A key strategy has inventory a for creating, communicating and deliveringmanage the organization’s relationships with those customers The Marketing Mix Is a combination of the •Place – Channels of distribution that been standardization through automation service 4 P’s of Product, Price, Place and ensure the product or service is value to customers and for managing W HO MARKETS? Promotion Product Place available when and where customer relationships in ways that benefit customers want it PRICE Everyone markets: firms market their products or services, • Product – The product or service the organization and its stakeholders. non-profit organizations use marketing to attract clients and offering including packaging, • Promotion – The variety of • Money or other things are given up in exchange • Loss leader – a low price to lure consumers in the donations, individuals market themselves to gain employment. warranty, after sale service, branding, communication tools that are source: http://www.marketingpower.com for a good or service hopes of up-selling them The list is endless company image and value integrated together to ensure • Price is often an indicator of value when it is Cost Approach • Price – What the customer pays to Price Promotion the consumer is aware of the compared with the benefits of the product This Permachart provides a synopsis of EVOLUTION OF MARKETING obtain the product or service; the price product or service and • Mark up – a percentage mark up on price to ultimately persuades them to • Price has a direct effect on firm’s profits cover expenses key Marketing terms and concepts that Marketing is a social process that is a major force in a modern is established in relation to production • Profit = (Unit Price X Quantity Sold) – Total Cost global economy costs and competition take ownership • Cost plus – the price reflects the sum of all costs together may be used as a quick and plus a set profit per unit easy to follow reference and study tool Four Distinct Stages in the Evolution of Marketing PRICING OBJECTIVES PRODUCTS Should fit with the marketing objectives • Experience curve – pricing is variable in that as experience is gained and costs fall so does the price Production CONSUMER GOODS • Accessory Equipment – products which are used They affect the pricing policies established by the firm Era • Sales Objectives – price to sell to generate salesProfit Approach Goods purchased by the ultimate consumer to assist in the manufacture of goods but are not and market share • Target profit – the price is set to achieve a Sales used in the goods such as computers or office particular profit target Era Types of Consumer Goods: furniture • Profit Objectives – price to generate the desired • Convenience goods – bought often with little profit – target return or return on investment • Target return on sales – the price is set to Marketing • Installations – expensive major capital equipment achieve a return on sales target Concept Era thought or effort. Consumer generally knows the required to manufacture other products but not in • Status Quo Objectives – price to maintain product before purchasing. Must be widely available the actual product harmony in the competitive environment • Targetreturnoninvestment–thepriceissettoachieve Market • Shopping Goods – products bought less frequently a target return on the investment in the product Orientation PRODUCT LIFE CYCLE • New: Social Responsibility Objectives – price such Era which the consumer will comparison shop for. The that the firm compromises profit to ensure the Once the list price has been established there are a consumer looks for suitability, quality, price and sThe stages the product goes through in the marketplace betterment of the target consumer variety of pricing adjustments that can be made to 1860 1880 1900 1920 1940 1960 1980 2000 enhance the competitiveness and success of the • Specialty Goods – consumer has a strong brand APPROACHES TO SETTING A PRICE LEVEL pricing strategy preference and seeks the brand when shopping • Unsought Goods – products that the consumer Demand Approach • Discounts and Allowances – reductions from list • Production Era – only one choice so those who could afford it by the seller to buyer as a reward for some bought it. Produce all you can does not yet know about or knows about but does For new products activity the buyer performed not initially want • Skim – high entry level price • Sales Era – competition created choice so business emphasis • Geographic adjustments – reductions or was on aggressive selling BUSINESS GOODS • Penetrate – low entry level price adjustments made by the manufacturer and For established products wholesalers to reflect the cost of transportation • Marketing Concept Era – ‘an organization strives to satisfy the Goods and services used in the production of other needs of the customer while making a profit’ goods. Their key characteristic is derived demand • Prestige – high price to reinforce prestigious Price legalities (demand for the organizations product is driven by Time positioning is the driving force as companies focus on There are regulatory and legal restrictions the customer demand for consumer products) PACKAGING • Odd even – the use of .99 at the end of the price as determined by the • Price lining – a line of products priced at various levelsion Act that • Marketing Orientation Era – Types of Business Goods: The container on which product label information is today businesses focus on collecting • Raw Materials – unprocessed included • Target – price based on what it is assumed the must be considered materials that are used to consumer will pay when establishing the consumer information on a Functions of the Package: final price continuous basis, sharing this make other products • Bundle – two or more products priced together as • Component Parts and • To contain and protect contents a single package The practices receiving information throughout the • Promote products – communicate usage directions the most scrutiny are: organization and using the Materials – partially finished Competition Approach • Price fixing information to create value, materials or completely and reinforce positioning • Customary – pricing at a level that is the norm finished materials that are • Aid in storage and usage • Price discrimination customer satisfaction and for the industry • Deceptive pricing customer relationships used in the manufacturing of • Facilitate recycling and reducing environmental • Above, at or below the market – subjective other products damage pricing relative to competition • Predatory pricing www.permacharts.com © 2009-2012 Mindsource Technologies Inc. © 2009-2012 Mindsource Technologies Inc. © 2009-2012 Mindsource Technologies Inc. Introductory Marketing 2 Introductory Marketing 3 permacharts TM WHAT IS MARKETING? cont. SERVICES INTRODUCTORY ETHICAL MARKETING TARGET MARKETS Services are intangible activities offered to the • Inseparability – services are produced and Emphasis in Marketing Management in the 2000’s A target market is a group of people with similar consumer in exchange for money consumed at the same time and often the service provider and the service cannot be separated by has shifted from an emphasis on producers’ interests needs and who are expected to respond similarly to THE UNIQUE ASPECTS OF SERVICES: to consumer interests. However, despite this focus on a marketing action the consumer when evaluating the service MARKETING the consumer, organizations must consider the social • Intangibility – they cannot be held, touched or se• Inventory – because the service is produced and Target Markets evolve from the process of market before the purchase. A key service strategy is to WHAT IS MARKETING? and environmental implications of their decisions segmentation tangiblize the service through branding or imagery consumed at the same time by a service provider it is very important to • Inconsistency – because services are often manage demand. arketing is an organizational M arketing includes activities that deliver “value “ to customers MARKETING MIX delivered by people it is hard to maintain service M function and a set of processes by identifying customer needs and creating activities that You cannot quality at a consistent level. A key strategy has inventory a for creating, communicating and deliveringmanage the organization’s relationships with those customers The Marketing Mix Is a combination of the •Place – Channels of distribution that been standardization through automation service 4 P’s of Product, Price, Place and ensure the product or service is value to customers and for managing W HO MARKETS? Promotion Product Place available when and where customer relationships in ways that benefit customers want it PRICE Everyone markets: firms market their products or services, • Product – The product or service the organization and its stakeholders. non-profit organizations use marketing to attract clients and offering including packaging, • Promotion – The variety of • Money or other things are given up in exchange • Loss leader – a low price to lure consumers in the donations, individuals market themselves to gain employment. warranty, after sale service, branding, communication tools that are source: http://www.marketingpower.com for a good or service hopes of up-selling them The list is endless company image and value integrated together to ensure • Price is often an indicator of value when it is Cost Approach • Price – What the customer pays to Price Promotion the consumer is aware of the compared with the benefits of the product This Permachart provides a synopsis of EVOLUTION OF MARKETING obtain the product or service; the price product or service and • Mark up – a percentage mark up on price to ultimately persuades them to • Price has a direct effect on firm’s profits cover expenses key Marketing terms and concepts that Marketing is a social process that is a major force in a modern is established in relation to production • Profit = (Unit Price X Quantity Sold) – Total Cost global economy costs and competition take ownership • Cost plus – the price reflects the sum of all costs together may be used as a quick and plus a set profit per unit easy to follow reference and study tool Four Distinct Stages in the Evolution of Marketing PRICING OBJECTIVES PRODUCTS Should fit with the marketing objectives • Experience curve – pricing is variable in that as experience is gained and costs fall so does the price Production CONSUMER GOODS • Accessory Equipment – products which are used They affect the pricing policies established by the firm Era • Sales Objectives – price to sell to generate salesProfit Approach Goods purchased by the ultimate consumer to assist in the manufacture of goods but are not and market share • Target profit – the price is set to achieve a Sales used in the goods such as computers or office particular profit target Era Types of Consumer Goods: furniture • Profit Objectives – price to generate the desired • Convenience goods – bought often with little profit – target return or return on investment • Target return on sales – the price is set to Marketing • Installations – expensive major capital equipment achieve a return on sales target Concept Era thought or effort. Consumer generally knows the required to manufacture other products but not in • Status Quo Objectives – price to maintain product before purchasing. Must be widely available the actual product harmony in the competitive environment • Targetreturnoninvestment–thepriceissettoachieve Market • Shopping Goods – products bought less frequently a target return on the investment in the product Orientation PRODUCT LIFE CYCLE • New: Social Responsibility Objectives – price such Era which the consumer will comparison shop for. The that the firm compromises profit to ensure the Once the list price has been established there are a consumer looks for suitability, quality, price and sThe stages the product goes through in the marketplace betterment of the target consumer variety of pricing adjustments that can be made to 1860 1880 1900 1920 1940 1960 1980 2000 enhance the competitiveness and success of the • Specialty Goods – consumer has a strong brand APPROACHES TO SETTING A PRICE LEVEL pricing strategy preference and seeks the brand when shopping • Unsought Goods – products that the consumer Demand Approach • Discounts and Allowances – reductions from list • Production Era – only one choice so those who could afford it by the seller to buyer as a reward for some bought it. Produce all you can does not yet know about or knows about but does For new products activity the buyer performed not initially want • Skim – high entry level price • Sales Era – competition created choice so business emphasis • Geographic adjustments – reductions or was on aggressive selling BUSINESS GOODS • Penetrate – low entry level price adjustments made by the manufacturer and For established products wholesalers to reflect the cost of transportation • Marketing Concept Era – ‘an organization strives to satisfy the Goods and services used in the production of other needs of the customer while making a profit’ goods. Their key characteristic is derived demand • Prestige – high price to reinforce prestigious Price legalities (demand for the organizations product is driven by Time positioning is the driving force as companies focus on There are regulatory and legal restrictions the customer demand for consumer products) PACKAGING • Odd even – the use of .99 at the end of the price as determined by the • Price lining – a line of products priced at various levelsion Act that • Marketing Orientation Era – Types of Business Goods: The container on which product label information is today businesses focus on collecting • Raw Materials – unprocessed included • Target – price based on what it is assumed the must be considered materials that are used to consumer will pay when establishing the consumer information on a Functions of the Package: final price continuous basis, sharing this make other products • Bundle – two or more products priced together as • Component Parts and • To contain and protect contents a single package The practices receiving information throughout the • Promote products – communicate usage directions the most scrutiny are: organization and using the Materials – partially finished Competition Approach • Price fixing information to create value, materials or completely and reinforce positioning • Customary – pricing at a level that is the norm finished materials that are • Aid in storage and usage • Price discrimination customer satisfaction and for the industry • Deceptive pricing customer relationships used in the manufacturing of • Facilitate recycling and reducing environmental • Above, at or below the market – subjective other products damage pricing relative to competition • Predatory pricing www.permacharts.com © 2009-2012 Mindsource Technologies Inc. © 2009-2012 Mindsource Technologies Inc. © 2009-2012 Mindsource Technologies Inc. Introductory Marketing 2 Introductory Marketing 3 permacharts TM WHAT IS MARKETING? cont. SERVICES INTRODUCTORY ETHICAL MARKETING TARGET MARKETS Services are intangible activities offered to the • Inseparability – services are produced and Emphasis in Marketing Management in the 2000’s A target market is a group of people with similar consumer in exchange for money consumed at the same time and often the service provider and the service cannot be separated by has shifted from an emphasis on producers’ interests needs and who are expected to respond similarly to THE UNIQUE ASPECTS OF SERVICES: to consumer interests. However, despite this focus on a marketing action the consumer when evaluating the service MARKETING the consumer, organizations must consider the social • Intangibility – they cannot be held, touched or se• Inventory – because the service is produced and Target Markets evolve from the process of market before the purchase. A key service strategy is to WHAT IS MARKETING? and environmental implications of their decisions segmentation tangiblize the service through branding or imagery consumed at the same time by a service provider it is very important to • Inconsistency – because services are often manage demand. arketing is an organizational M arketing includes activities that deliver “value “ to customers MARKETING MIX delivered by people it is hard to maintain service M function and a set of processes by identifying customer needs and creating activities that You cannot quality at a consistent level. A key strategy has inventory a for creating, communicating and deliveringmanage the organization’s relationships with those customers The Marketing Mix Is a combination of the •Place – Channels of distribution that been standardization through automation service 4 P’s of Product, Price, Place and ensure the product or service is value to customers and for managing W HO MARKETS? Promotion Product Place available when and where customer relationships in ways that benefit customers want it PRICE Everyone markets: firms market their products or services, • Product – The product or service the organization and its stakeholders. non-profit organizations use marketing to attract clients and offering including packaging, • Promotion – The variety of • Money or other things are given up in exchange • Loss leader – a low price to lure consumers in the donations, individuals market themselves to gain employment. warranty, after sale service, branding, communication tools that are source: http://www.marketingpower.com for a good or service hopes of up-selling them The list is endless company image and value integrated together to ensure • Price is often an indicator of value when it is Cost Approach • Price – What the customer pays to Price Promotion the consumer is aware of the compared with the benefits of the product This Permachart provides a synopsis of EVOLUTION OF MARKETING obtain the product or service; the price product or service and • Mark up – a percentage mark up on price to ultimately persuades them to • Price has a direct effect on firm’s profits cover expenses key Marketing terms and concepts that Marketing is a social process that is a major force in a modern is established in relation to production • Profit = (Unit Price X Quantity Sold) – Total Cost global economy costs and competition take ownership • Cost plus – the price reflects the sum of all costs together may be used as a quick and plus a set profit per unit easy to follow reference and study tool Four Distinct Stages in the Evolution of Marketing PRICING OBJECTIVES PRODUCTS Should fit with the marketing objectives • Experience curve – pricing is variable in that as experience is gained and costs fall so does the price Production CONSUMER GOODS • Accessory Equipment – products which are used They affect the pricing policies established by the firm Era • Sales Objectives – price to sell to generate salesProfit Approach Goods purchased by the ultimate consumer to assist in the manufacture of goods but are not and market share • Target profit – the price is set to achieve a Sales used in the goods such as computers or office particular profit target Era Types of Consumer Goods: furniture • Profit Objectives – price to generate the desired • Convenience goods – bought often with little profit – target return or return on investment • Target return on sales – the price is set to Marketing • Installations – expensive major capital equipment achieve a return on sales target Concept Era thought or effort. Consumer generally knows the required to manufacture other products but not in • Status Quo Objectives – price to maintain product before purchasing. Must be widely available the actual product harmony in the competitive environment • Targetreturnoninvestment–thepriceissettoachieve Market • Shopping Goods – products bought less frequently a target return on the investment in the product Orientation PRODUCT LIFE CYCLE • New: Social Responsibility Objectives – price such Era which the consumer will comparison shop for. The that the firm compromises profit to ens
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