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Introduction to Business

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Introduction to Business ­MGT 211
VU
Lesson 22
MARKETING
The American Marketing Association defines marketing as the process of planning and
executing the conception, pricing, promotion, and distribution of ideas, goods, and services to
create exchanges that satisfy individual and organizational objectives.
Marketing plays an important role in society by helping people satisfy their needs and wants
and by helping organizations decide what to produce. Value compares a product's benefits
with its costs. Consumers seek products that offer value. Utility is the value to the customer
that is added by the marketer. There are four types of utility: time, place, ownership, and form
utility.
The external environment consists of the outsides forces that influence marketing strategy and
decision making. The political/legal environment includes laws and regulations, both domestic
and foreign, that may define or constrain business activities. The social/cultural environment is
the context within which people's values, beliefs, and ideas affect marketing decisions. The
technological environment includes the technological developments that affect existing and
new products. The economic environment consists of the conditions, such as inflation,
recession, and interest rates, that influence both consumer and organizational spending
patterns.
Market segmentation is the process of dividing markets into categories of customers.
Businesses have learned that marketing is more successful when it is aimed toward specific
target markets groups of consumers with similar wants and needs. Markets may be
segmented by geographic, demographic, psychographic, or product use variables.
Market research is the study of what buyers need and of the best ways to meet those needs.
This process entails studying the firm's customers, evaluating possible changes in the
marketing mix, and helping marketing managers make better decisions about marketing
programs. The marketing research process involves the selection of a research method, the
collection of data, the analysis of data, and the preparation of a report that may include
recommendations for action. The four most common research methods are observation,
surveys, focus groups, and experimentation.
A number of personal and psychological considerations, along with various social and cultural
influences, affect consumer behavior. When making buying decisions, consumers first
determine or respond to a problem or need and then collect as much information as they think
necessary before making a purchase. Post-purchase evaluations are also important to
marketers because they influence future buying patterns.
The industrial market includes firms that buy goods falling into one of two categories: Goods to
be converted into other products and goods that are used up during production. Farmers and
manufacturers are members of the industrial market, Members of the reseller market (mostly
wholesalers) are intermediaries who buy and resell finished goods. Besides governments and
agencies at all levels, the government and institutional market includes such non-government
organizations as hospitals, museums, and charities.
There are four main differences between consumer and organizational buying behavior. First,
the nature of demand is different; in organizational markets it is often derived (resulting from
related consumer demand) or inelastic (largely unaffected by price changes). Second,
organizational buyers are typically professionals, specialists, or experts. Third, organizational
buyers develop product specifications, evaluate alternatives more thoroughly, and make more
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Introduction to Business ­MGT 211
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systematic post-purchase evaluations. Finally, they often develop enduring buyer-seller
relationships.
1. What Is Marketing?
Although you may be just beginning your classroom study of marketing, organizations like
Microsoft and Coca-Cola have been trying to sell you things for many years. You have
probably become accustomed to many marketing techniques--contests, advertisements,
fascinating displays placed in strategic locations, price markdowns and giveaways. What
you are about to learn is that marketing requires a lot of planning and implementation to
develop a new product, set its price, get it to consumers, and convince them to buy it.
Marketing, as defined by the American Marketing Association, is planning and executing the
conception, pricing, promotion, and distribution of ideas, goods, and services to create
exchanges that satisfy individual and organizational objectives. However, in laymen's terms,
marketing is quite simply finding a need and filling it.
a. Marketing:
Providing
Value
and
Satisfaction
Marketing plays an important role in society by helping people satisfy their
needs and wants and by helping organizations decide what to produce.
i.
Value compares a product's benefits with its costs.
ii.
Utility is the value to the customer that is added by the marketer. In
other words, utility is the ability of a product to satisfy a human want or
need. There are four types of utility:
Time Utility is making the product available when the customer
wants it.
Place Utility is making the product available where consumers
want it.
Ownership Utility is the customer value created when someone
takes ownership of a product. Marketers create possession utility
by facilitating the transaction.
Form Utility refers to the characteristics of the product such as
its shape, size, color, function, and style.
b. Marketing: Goods, Services, and Ideas
The influence of marketing permeates everyday life, applying to goods,
services, and ideas. Marketing applies to tangible and intangible goods and
include:
Consumer Goods--products purchased by consumers for personal
use.
Industrial Goods--products purchased by companies to produce other
products.
Services--intangible products, such as time, expertise, or an activity,
that can be purchased.
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Introduction to Business ­MGT 211
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Ideas--intangibles such as, MADD, Mothers Against Drunk Driving.
Relationship Marketing emphasizes lasting relationships with customers
and suppliers. Purchase incentives and customer loyalty programs are just
some of the ways in which firms try to promote these relationships.
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Table of Contents:
  1. INTRODUCTION:CONCEPT OF BUSINESS, KINDS OF INDSTRY, TYPES OF TRADE
  2. ORGANIZATIONAL BOUNDARIES AND ENVIRONMENTS:THE ECONOMIC ENVIRONMENT
  3. BUSINESS ORGANIZATION:Sole Proprietorship, Joint Stock Company, Combination
  4. SOLE PROPRIETORSHIP AND ITS CHARACTERISTICS:ADVANTAGES OF SOLE PROPRIETORSHIP
  5. PARTNERSHIP AND ITS CHARACTERISTICS:ADVANTAGES AND DISADVANTAGES OF PARTNERSHIP
  6. PARTNERSHIP (Continued):KINDS OF PARTNERS, PARTNERSHIP AT WILL
  7. PARTNERSHIP (Continued):PARTNESHIP AGREEMENT, CONCLUSION, DUTIES OF PARTNERS
  8. ORGANIZATIONAL BOUNDARIES AND ENVIRONMENTS:ETHICS IN THE WORKPLACE, SOCIAL RESPONSIBILITY
  9. JOINT STOCK COMPANY:PRIVATE COMPANY, PROMOTION STAGE, INCORPORATION STAGE
  10. LEGAL DOCUMENTS ISSUED BY A COMPANY:MEMORANDUM OF ASSOCIATION, CONTENTS OF ARTICLES
  11. WINDING UP OF COMPANY:VOLUNTARY WIDNIGN UP, KINDS OF SHARE CAPITAL
  12. COOPERATIVE SOCIETY:ADVANTAGES OF COOPERATIVE SOCIETY
  13. WHO ARE MANAGERS?:THE MANAGEMENT PROCESS, BASIC MANAGEMENT SKILLS
  14. HUMAN RESOURCE MANAGEMENT:Human Resource Planning
  15. STAFFING:STAFFING THE ORGANIZATION
  16. STAFF TRAINING & DEVELOPMENT:Typical Topics of Employee Training, Training Methods
  17. BUSINESS MANAGERíS RESPONSIBILITY PROFILE:Accountability, Specific responsibilities
  18. COMPENSATION AND BENEFITS:THE LEGAL CONTEXT OF HR MANAGEMENT, DEALING WITH ORGANIZED LABOR
  19. COMPENSATION AND BENEFITS (Continued):MOTIVATION IN THE WORKPLACE
  20. STRATEGIES FOR ENHANCING JOB SATISFACTION AND MORALE
  21. MANAGERIAL STYLES AND LEADERSHIP:Changing Patterns of Leadership
  22. MARKETING:What Is Marketing?, Marketing: Providing Value and Satisfaction
  23. THE MARKETING ENVIRONMENT:THE MARKETING MIX, Product differentiation
  24. MARKET RESEARCH:Market information, Market Segmentation, Market Trends
  25. MARKET RESEARCH PROCESS:Select the research design, Collecting and analyzing data
  26. MARKETING RESEARCH:Data Warehousing and Data Mining
  27. LEARNING EXPERIENCES OF STUDENTS EARNING LOWER LEVEL CREDIT:Discussion Topics, Market Segmentation
  28. UNDERSTANDING CONSUMER BEHAVIOR:The Consumer Buying Process
  29. THE DISTRIBUTION MIX:Intermediaries and Distribution Channels, Distribution of Business Products
  30. PHYSICAL DISTRIBUTION:Transportation Operations, Distribution as a Marketing Strategy
  31. PROMOTION:Information and Exchange Values, Promotional Strategies
  32. ADVERTISING PROMOTION:Advertising Strategies, Advertising Media
  33. PERSONAL SELLING:Personal Selling Situations, The Personal Selling Process
  34. SALES PROMOTIONS:Publicity and Public Relations, Promotional Practices in Small Business
  35. THE PRODUCTIVITY:Responding to the Productivity Challenge, Domestic Productivity
  36. THE PLANNING PROCESS:Strengths, Weaknesses, Threats
  37. TOTAL QUALITY MANAGEMENT:Planning for Quality, Controlling for Quality
  38. TOTAL QUALITY MANAGEMENT (continued):Tools for Total Quality Management
  39. TOTAL QUALITY MANAGEMENT (continued):Process Re-engineering, Emphasizing Quality of Work Life
  40. BUSINESS IN DIGITAL AGE:Types of Information Systems, Telecommunications and Networks
  41. NON-VERBAL COMMUNICATION MODES:Body Movement, Facial Expressions
  42. BUSINESS ORGANIZATIONS:Organization as a System
  43. ACCOUNTING:Accounting Information System, Financial versus Managerial Accounting
  44. TOOLS OF THE ACCOUNTING TRADE:Double-Entry Accounting, Assets
  45. FINANCIAL MANAGEMENT:The Role of the Financial Manager, Short-Term (Operating) Expenditures