- Fairview High School

Transcription

In this unit you will find
• Chapter 1
Marketing Is
All Around Us
• Chapter 2
The Marketing
Plan
A N A LY Z E T H E A D
This ad is promoting a wellknown breakfast cereal.
What is the main theme?
How does the picture work
with the words?
xxxvi
THE MARKETING
PLAN A marketing
PRINT AD LANGUAGE
Print ads use powerful visual components and interesting, catchy writing to draw in the reader.
Log on to glencoe.com and go the Marketing Essentials
Online Learning Center (OLC). Find the WebQuest for
Unit 1. Begin the activity by collecting magazines and newspapers. Search for ads that have effective advertising slogans.
plan is a document
with these five sections
that detail a company’s
marketing activities.
The highlighted
elements shown
below are discussed in
the unit.
ANALYSIS
SWOT
Economic
Socio-Cultural
Technological
Competitive
Marketing Internship NASCAR wants to hold races in the
New York City area and attract teenagers as fans.
As you read, use this checklist to prepare for the unit project:
✓ Find out which companies sponsor NASCAR.
✓ Think about possible sponsors who make teen products.
✓ Think about the characteristics of NASCAR’s target
market and the new teen market.
1
STRATEGY
2
Promotion
Place
Price
Product
IMPLEMENTATION
3
Organization
Management
Staffing
BUDGET
4
Cost of Sales
Cost of Promotion
Income and Expenses
CONTROL
5
Evaluation
Performance Measures
Performance Analysis
In this unit
Marketing Core Functions
Pricing
Promotion
glencoe.com
Selling
1
CHAPTER
1
Marketing Is All
Around Us
Chapter Objectives
After reading this chapter, you should be
able to:
• Define marketing
• List the seven marketing core functions
• Understand the marketing concept
• Analyze the benefits of marketing
• Apply the concept of utility
• Describe the concept of market
• Differentiate consumer and industrial markets
• Describe market share
• Define target market
• List the four components of the
marketing mix
EXPLORE THE PHOTO
Market Talk
In the United States, it is rare to
be far from an ad of some sort. A passing hiker
in a national park might be wearing a T-shirt
with a corporate logo. A sign on the side of a
country road could announce fresh eggs for
sale. In a mall or a major city, the marketing is
much more intense. Everywhere you look, you
see signs, brands, and ads.
Quick Think
Promotion is only one aspect of
marketing. How would you define marketing and
all the activities that fall under its umbrella?
2
UNIT 1 — THE WORLD OF MARKETING
Karlheinz Oster/zefa/Corbis
DECA Events These acronyms represent DECA competitive events that involve concepts in this chapter:
BMDM
ADC*
ASM
AAM
HLM*
FMAL*
EMDM*
BSM
RMS
RFSM
QSRM
HMDM
TSE*
TMDM
SMDM
SEM*
Performance Indicators The performance indicators
represent key skills and knowledge. Relating them to
the concepts in this chapter is your key to success
in DECA competitive events. Keep this in mind as
you read, and write notes when you find material that
helps you master a key skill. In these DECA events,
you should follow these performance indicators:
• Distinguish between economic goods and services.
• Determine the forms of economic utility created by
business activities.
• Explain the concept of marketing strategies.
• Explain the concept of market and market
identification.
• Select target market.
The events with an asterisk (*) also include:
• Describe the nature of target marketing in a specific
industry.
Some events include these performance indicators:
ADC
Select target market.
EMDM Identify online target markets.
FMAL Describe factors affecting consumer choice
for a food marketing business.
HLM
Describe the nature of target marketing in
the hospitality industry.
SEM
Identify sport/event target-market
segments.
TSE
Describe the nature of target marketing in
technical marketing.
ROLE PLAY Check your understanding of DECA
performance indicators with the DECA activity
in this chapter’s review. For more information
and DECA Prep practice, go to the Marketing
Essentials Online Learning Center (OLC) through
glencoe.com.
glencoe.com
Chapter 1 — Marketing Is All Around Us
3
SECTION 1.1
Marketing and the
Marketing Concept
READING GUIDE
BEFORE YOU READ
Connect Have you ever been influenced by marketing? Explain and give examples.
O B J E C T IV E S
T H E M A IN IDEA
• Define marketing
• List the seven marketing core
functions
• Understand the marketing
concept
To be a successful marketer, you need to understand the marketing
skills, marketing core functions, and basic tools of marketing.
G R A P H I C ORGANIZER
Draw an umbrella to organize the marketing core functions.
KEY TERMS
• marketing
• goods
• services
• marketing concept
ling
Sel
A C A D E M IC V OC A B U L A R Y
You will find these words in your
reading and on your tests. Make
sure you know their meanings.
• create
• conduct
Go to the OLC through glencoe.com for printable graphic organizers,
Academic Vocabulary definitions, and more.
A C A D E M IC STANDARDS
English Language Arts
NCTE 4 Use written language to communicate effectively.
Social Studies
NCSS 2 Time, Continuity, and Change: Study the ways human
beings view themselves over time.
The Scope of Marketing
Connect Relate the
definition of marketing
to the marketing core
functions and to the
marketing concept.
4
You already know a lot about marketing because it is all
around you. You have been a consumer for many years, and
you have made decisions about products you liked and did not
like. As you study marketing, you will analyze what businesses
do to influence consumers’ buying decisions. That knowledge
will help you begin to think like a marketer.
Marketing is a broad term that includes many activities and
requires many skills. Marketing is the process of planning,
and wants are services. Intangible means
you cannot physically touch them. Services
involve a task, such as cooking a hamburger or
cutting hair. Banks, dry cleaners, amusement
parks, movie theaters, and accounting offices
all provide economic services.
Every time someone sells or buys something, an exchange takes place in the marketplace. The marketplace is the commercial
environment where such trades happen. It is
the world of shops, Internet stores, financial
institutions, catalogs, and much more.
Skills and Knowledge
• MARKETING IDEAS The definition of marketing
includes marketing ideas, such as eating healthful
foods.
What other ideas have you seen marketed?
pricing, promoting, selling, and distributing
ideas, goods, or services to create exchanges
that satisfy customers. Note that marketing is a
process. This means it is ongoing, and it
changes. As a marketer, you need to keep
up with trends and consumer attitudes. The
products, ideas, or services you develop and
the way you price, promote, and distribute
them should reflect these trends and attitudes.
All marketing careers support this effort.
Ideas, Goods, and Services
Marketing promotes ideas, goods, and
services. Politicians, for example, use marketing techniques to promote their plavhtform,
or ideas. Goods are tangible items that have
monetary value and satisfy your needs and
wants such as cars, toys, furniture, televisions,
clothing, and candy. Intangible items that
have monetary value and satisfy your needs
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Marketing is one career cluster in business
administration. The practice of marketing
depends on many key areas of skill and knowledge. These areas are listed in the illlustration
on page 1 that introduces the unit. Many of
the topics that you will study in Marketing
Essentials are based on these areas of skill and
knowledge:
1. Business Law Understand business’s
responsibility to know, abide by, and
enforce laws and regulations that affect
business operations and transactions
2. Communications
Understand the
concepts, strategies, and systems used to
obtain and convey ideas and information
3. Customer Relations Understand the
various techniques and strategies used to
foster positive, ongoing relationships with
customers
4. Economics Understand the economic
principles and concepts fundamental to
business operations
5. Emotional Intelligence Understand
techniques, strategies, and systems used
to foster self-understanding and enhance
relationships with others
6. Entrepreneurship Understand the
concepts, processes, and skills associated
with identifying new ideas, opportunities,
and methods and with creating or starting
a new project or venture
7. Financial Analysis Understand tools,
strategies, and systems used to maintain,
monitor, control, and plan the use of
financial resources
5
8. Human Resource Management Understand the tools techniques, and systems that businesses use to plan, staff,
lead, and organize its human resources
9. Information Management Understand tools, strategies, and systems needed
to access, process, maintain, evaluate, and
disseminate information to assist business
decision-making
10. Marketing Understand the tools, techniques, and systems that businesses use
to create exchanges and satisfy organizational objectives
11. Operations Understand the processes
and systems implemented to monitor, plan, and control the day-to-day
activities required for continued business
functioning
12. Professional Development Understand concepts, tools, and strategies used
to explore, obtain, and develop in a business career
13. Strategic Management Understand
tools, techniques, and systems that affect
a business’s ability to plan, control, and
organize an organization/department
Seven Marketing Core Functions
The marketing core includes seven functions: channel management, marketing information management, market planning,
pricing, product/service management, promotion, and selling. The illustration on page
1 also includes these functions. The marketing
core functions define all the aspects that are
part of the practice of marketing.
Channel Management
Channel Management, or Distribution, is
the process of deciding how to get goods into
customer’s hands. Physically moving and storing goods is part of distribution planning. The
main methods of transportation are by truck,
rail, ship, or air. Some large retail chains store
products in central warehouses for later distribution. Distribution also involves the systems
that track products so that they can be located
at any time.
6
Market Planning
Market planning involves understanding
the concepts and strategies used to develop
and target specific marketing strategies to a
select audience. This function requires an
in-depth knowledge of activities that involve
determining information needs, designing
data-collection processes, conducting the
collection of data, analyzing data, presenting data, and using that data for creating a
marketing plan.
Marketing Information Management
Good business and marketing decisions
rely on good information about customers,
trends, and competing products. Gathering
this information, storing it, and analyzing it
are all part of marketing information management. This research is done on a continual
basis and through special marketing research
studies and surveys. This is what marketers
do to find out about customers, their habits
and attitudes, where they live, and trends in
the marketplace. Companies conduct research so they can be successful at marketing
and selling their products.
Pricing
Pricing decisions dictate how much to
charge for goods and services in order to
make a profit. Pricing decisions are based on
costs and on what competitors charge for the
same product or service. To determine a price,
marketers must also determine how much
customers are willing to pay.
Product/Service Management
Product/service management is obtaining, developing, maintaining, and improving
a product or a product mix in response to
market opportunities. Marketing research
guides product/service management toward
what the consumer needs and wants.
Promotion
Promotion is the effort to inform, persuade, or remind potential customers about a
business’s products or services. Television and
radio commercials are forms of promotion.
This type of promotion is called advertising.
Promotion is also used to improve a company’s public image. A company can show
that it is socially responsible by recycling
materials or cleaning up the environment.
Promotion concepts and strategies are used to
achieve success in the marketplace.
Selling
Selling provides customers with the goods
and services they want. This includes selling
in the retail market to you, the customer, and
selling in the business-to-business market to
wholesalers, retailers, or manufacturers.
Selling techniques and activities include
determining client needs and wants and
responding through planned, personalized
communication. The selling process influences
purchasing decisions and enhances future
business opportunities.
The Marketing Concept
The marketing concept is 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. For an
organization to be successful, all seven marketing core functions need to support this idea.
The personnel responsible for those func
tions must understand the marketing concept
and reach for the same goal in order to send
a consistent message to the customer. The
message is that the customer satisfaction is
most important. Everyone in an organization
needs to recognize that repeat customers keep
a company in business.
Customer Relationship Management (CRM)
In today’s marketplace, customer relationship is most important. Customer relationship management (CRM) is an aspect of
marketing that combines customer information (through database and computer
technology) with customer service and marketing communications.
Key Terms and Concepts
1. Name two ideas that can be marketed.
2. Where do exchanges take place?
3. What is the main difference between consumers and industrial users?
Academic Skills
Math
4. A customer purchases two tables at $149.99
each and would like them to be delivered. Your
company charges customers $50 for delivery
and the state imposes a 5 percent sales tax on
furniture, but not on the delivery charge. What
is the total amount due from the customer?
Social Studies/Economics
5. List at least three ways the Internet has
changed marketing functions.
Problem Solving Think
about which operations to use.
1. Use addition to calculate the sum for
both tables, which is the subtotal.
2. To find the sales tax amount,
multiply the subtotal by the tax
percentage.
3. Add up the sales tax, subtotal, and
delivery charge to find the total
amount due.
For help, go to the Math Appendix
located at the back of this book.
Check your answers at the Marketing Essentials OLC through glencoe.com.
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7
SECTION 1.2
The Importance
of Marketing
READING GUIDE
BEFORE YOU READ
Use Prior Knowledge When did you last shop at a mall? Did you witness any promotion effort?
Did you compare prices? What role did this play in your decision to buy?
O B J E C T IV E S
T H E M A IN IDEA
• Analyze the benefits of
marketing
• Apply the concept of utility
Marketing supports competition and offers benefits to consumers.
KEY TERMS
G R A P H I C ORGANIZER
Draw the figure below. As you read this section, write in the benefits
of marketing and list five utilities on the extended lines.
• utility
Utility
Added
Value
• impact
• benefit
Benefits of
Marketing
Form
Place
NCTE 1 Read texts to acquire new information.
Mathematics
NCTM Number and Operations Compute fluently and make
reasonable estimates.
Economic Benefits of Marketing
Connect List your
own experiences and
observations about how
marketing benefits you
personally.
8
Through the study of marketing you will realize how important marketing is and how much it affects your life and the lives
of other consumers. Its impact is more dramatic when you consider how it affects our economy and standard of living.
Marketing plays an important role in an economy because it
provides the means for competition to take place. In a competitive marketplace, businesses try to create new or improved
Lower Prices
Marketing activities increase demand, and
this helps to lower prices. When demand is
high, manufacturers can produce products in
larger quantities. This reduces the unit cost of
each product. This is because the fixed costs
(such as the rent on a building) remain the
same whether the company produces 10 units
or 10,000 units. When a company produces a
larger quantity of a product, it spends less per
unit on fixed costs. The company can charge a
lower price per unit, sell more units, and make
more money. Here is an example using a fixed
cost of $20,000.
Quantity
Fixed Cost
Produced
Per Unit
10,000
$2.00
($20,000 ⫼ 10,000)
•NEW PRODUCTS One of the major economic
benefits of marketing is the proliferation of new and
improved products.
List three new and improved products you have seen
marketed lately.
products at lower prices than their competitors. Those efforts force them to be efficient
and responsive to consumers. In addition,
businesses look for ways to add value to a
consumer’s shopping experience. Let’s look at
the economic benefits of marketing to the
economy and to consumers.
New and Improved Products
Marketing generates competition, which in
turn fosters new and improved products. Businesses always look for ways to satisfy customers’ wants and needs and to keep customers
interested. This creates a larger variety of goods
and services. For example, personal computers
have gotten smaller, lighter, more powerful,
and less expensive. As more people use computers, this market continues to grow.
Summarize What is the benefit of
competition?
200,000
.10
($20,000 ⫼ 200,000)
In addition, when products become
popular, more competitors enter the marketplace. To remain competitive, marketers
find ways to lower their prices. Look at the
DVD market for some examples of this phenomenon. DVD players were introduced in
1997. Since then, there has been an explosion in the sales and rentals of DVDs and
DVD players. Combination DVD/CD/MP3
players were very costly products when they
were introduced, but now they can be purchased for about $100.
Added Value and Utility
The functions of marketing add value to a
product. This added value in economic terms
is called utility. Utilities are the attributes of
a product or service that make it capable of
satisfying consumers’ wants and needs.
There are five economic utilities involved
with all products: form, place, time, possession, and information. Although form utility
is not directly related to marketing, much of
what goes into creating new products, such as
marketing research and product design, makes
it an integral part of the marketing process.
9
Supermarket
Personal Shopper
Albertsons introduced its Shop ‘n’ Scan
technology by testing it—first in a handful of
stores in Chicago, then expanding the test to
more than 100 stores in the Dallas area. The
tests started in October 2002. By October
2004 the company was planning to roll out
the system in other cities.
The system enables customers to use handheld scanners to scan and bag their purchases
as they shop at several Jewel-Osco stores.
Focus on the Shopper
The technology has some other customerfriendly features. A portable computer keeps
a running total of the prices of the items in
the cart. Customers can also use an express
pay station to ring up their purchases.
Company Goals
These customer-focused developments are
in keeping with the overall policies and objectives of the company:
• Focusing on customers
• Building efficiency
• Capitalizing on technology
The company has had success with Shop ‘n’
Scan. According to the Wall Street Journal,
shoppers using the technology bought, on
average, twice as many groceries as shoppers using regular carts.
How does this technology add value
(utility) to a customer’s shopping
experience?
Go to the Marketing Essentials OLC
through glencoe.com to find a project on
technology as added value.
10
Form Utility
Form utility involves changing raw materials or putting parts together to make them
more useful. In other words, it deals with making or producing things. The manufacturing
of products involves taking things of little value
by themselves and putting them together to
create more value. If you consider the value of
a zipper, a spool of thread, and several yards
of cloth, each would have some value, but not
as much as when you put all three together by
making a jacket.
Form utility involves making products that
consumers need and want. Special features or
ingredients in a product add value and increase
its form utility. For example, electronic controls on the steering wheel of an automobile
add value to the final product.
Place Utility
Place utility involves having a product
where customers can buy it. Businesses study
consumer shopping habits to determine the
most convenient and efficient locations to sell
products.
Some businesses use a direct approach
by selling their products through catalogs,
and other businesses rely on retailers to sell
their products. The Internet offers even more
options to businesses that want to sell their
products directly to their customers without
the use of any intermediaries.
Time Utility
Time utility is having a product available at a certain time of year or a convenient
time of day. For example, supermarkets and
other food stores offer convenient shopping
hours or they are open 24-hours a day. Retailers often have extended shopping hours during the busiest shopping season of the year,
from Thanksgiving till Christmas. Marketers
increase the value of products by having them
available when consumers want them.
Possession Utility
How do you come into possession of the
items you want? You generally buy them for
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a price. The exchange of a product for money
is possession utility. Retailers may accept
alternatives to cash, such as personal checks,
debit or credit cards, in exchange for their
merchandise. They may even offer installment or layaway plans (delayed possession
in return for gradual payment). Every one of
these options adds value to the product being
purchased. In fact, without these options,
some customers would not be able to buy the
items they want. In business-to-business situations, companies also grant their customers
credit. They may give them a certain period
(for example, 30 days) to pay a bill. This adds
value to the products they sell.
Possession utility is involved every time
legal ownership of a product changes hands.
Possession utility increases as purchase options
increase. The Internet also provides consumers with options to pay by providing secure
sites where credit cards are accepted.
Information Utility
Information utility involves communication with the consumer. Salespeople provide
information to customers by explaining
the features and benefits of products. Displays communicate information, too. Packaging and labeling inform consumers about
qualities and uses of a product. The label
on a frozen food entrée will tell you the
ingredients, nutritional information, directions for preparation, and any safety precautions needed.
Advertising informs consumers about
products, tells where to buy products, and
sometimes tells how much products cost.
Many manufacturers provide owners’ manuals that explain how to use their
products. Businesses also have Web sites
where they provide detailed information
about their companies and their products
for customers.
1. How does marketing help to lower prices?
2. In what way is marketing related to form utility?
3. Which utility is added by drive-through windows at fast-food
restaurants?
Academic Skills
Math
4. In a business-to-business transaction, the
seller offers the buyer a 2 percent discount for
paying a bill early. Assuming the buyer took
advantage of this offer, how much would be
discounted on a $10,000 invoice?
Science
5. Marketing has fostered new and improved
products, such as LCD computer and TV
screens, which are flatter and lighter than
their predecessors. Do research to find out
about LCDs (liquid crystal displays). What are
they and how do they work?
Number and Operations:
Percents A percent is a ratio comparing a number to 100. To convert percents to decimals, move the decimal
point two places to the left.
1. To solve the problem, convert the
percent to a decimal number.
2. Multiply that decimal number by
the invoice amount to find the
discount amount.
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CHAPTER 1 — MARKETING IS ALL AROUND US
11
SECTION 1.3
Fundamentals
of Marketing
READING GUIDE
BEFORE YOU READ
Predict How do you think marketers decide where to advertise their products?
O B J E C T IV E S
T H E M A IN IDEA
GRAPHIC ORGANIZER
• Describe the concept of
market
• Differentiate consumer and
industrial markets
• Describe market share
• Define target market
• List the four components of
the marketing mix
The term market refers to all the
people who might buy a product.
The marketing mix is a set of
four tools used to influence
buying decisions.
Draw these two diagrams. In the
first diagram, write four terms
about the concept of market. In
the second diagram, write the
four Ps of the marketing mix.
KEY TERMS
• market
• consumer market
• industrial market
• market share
• target market
• customer profile
• marketing mix
Market
Share
Product
Market
Marketing
Mix
• similar
• element
NCTE 3 Apply a wide range of strategies to comprehend, interpret,
evaluate, and appreciate texts.
Science
NSTA Content Standard C Students should develop an
understanding of the behavior of organisms.
Connect Jot down
examples of ads you
have seen or heard
and how they relate to
your reading.
12
Market and Market Identification
The terminology found in this section is the foundation for
future work and study in marketing. Remember these terms so
you can use them correctly when discussing marketing principles
and practices. These terms are used throughout this textbook.
So let’s begin your journey into becoming a marketer.
Marketers know that their product or service cannot appeal to everyone. To do their
job, they look for people who might have an
interest in or a need for their product. They
also look at people who have the ability to pay
for their product. These people often share
other similar needs and wants. All people who
share similar needs and wants and who have
the ability to purchase a given product are
called a market.
You could be part of the market for video
games, but not be part of the market for an
expensive car. Even though you may want an
expensive car, you may not have the means to
buy one. If you liked video games and had the
resources to buy or rent them, you would be
part of the video game market.
Consumer Versus
Industrial Markets
There are different types of markets. A
market can be described as a consumer market or an industrial market.
The consumer market consists of consumers who purchase goods and services for
personal use. Consumers’ needs and wants
generally fall into a few categories that address
their lifestyles. For the most part, consumers
are interested in products that will save them
money, make their lives easier, improve their
appearance, create status in the community,
or provide satisfaction.
The industrial market or businessto-business (B-to-B) market includes all businesses that buy products for use in their
operations. The goals and objectives of
business firms are somewhat different from
those in the consumer market. Most relate
to improving profits. Companies want to
improve productivity, increase sales, decrease
expenses, or make their work more efficient.
Companies that produce products for sale
in the consumer market consider the reseller
of their products to be part of the industrial
market. Therefore, they require two distinct
marketing plans to reach each market.
• ADVERTISING in the INDUSTRIAL MARKET
This ad highlights advantages to businesses who sell
specific products to customers.
How do the objectives for purchases in the industrial
market differ from those in the consumer market?
13
Market Share
1.1
• Who Leads in the Camera
Market? A company’s percentage
of total sales in a given market is
its market share.
Sony
20%
Others
25%
How do you think businesses use
the concept of market share in
their marketing programs?
Kodak
19.8%
Fuji Film
7.2%
Olympus
12%
Canon
16%
Go to the Marketing Essentials OLC through glencoe.com
to find a project on market share.
Market Share
A market is further described by the total
sales in a product category. Examples of
categories are video games, fax machines,
cameras, ice cream, or soft drinks. For example, everyone who bought digital still cameras in February 2004 from photo specialty,
electronic/appliance stores, computer/office
superstores, mass merchandisers, the Internet, and through mail order were part
of the $211,464,600 digital still camera
market at that time.
A company’s market share is its percentage of the total sales volume generated by all
companies that compete in a given market.
Knowing one’s market share helps marketers
analyze their competition and their status
in a given market. (See Figure 1.1.) Market
shares change all the time as new competitors
enter the market and as the size of the market
increases or decreases in volume.
14
Target Market and
Market Segmentation
Businesses know they cannot convince
everybody to buy their product or service.
They look for ways to offer their product or
service to the people who are most likely to be
interested. This involves segmenting, or breaking down the market into smaller groups that
have similar needs. Market segmentation is
the process of classifying customers by needs
and wants.
You already know that a market can be
segmented into a consumer and an industrial
market. Within those markets, further segmentation is possible. You will learn about
market segmentation in Chapter 2. The goal
of market segmentation is to identify the
group of people most likely to become customers. The group that is identified for a specific
marketing program is the target market.
Target markets are very important because
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(tl) Getty Images Editorial, (cl) Robe Gage/Getty Images
• MARKET SEGMENTATION A
professional photographer shops for a
top-performance camera to use as a work
tool while an amateur would look for a
basic, easy-to-use model.
How would marketing efforts differ for
these two types of cameras and customers?
all marketing strategies are directed to them.
When a business does not identify a target
market, its marketing plan has no focus.
Identifying the target market correctly is an
important key to success.
Consumers Versus Customers
A product may have more than one
target market. For example, manufacturers
of children’s cereal know that they need
to target children and parents differently.
They have two target markets: one is the
children (consumers) who will be asking
for the cereal and eating it. The other is the
parents (customers) who need to approve of
it and will be buying it. To reach the children, marketers might advertise on Saturday
morning television programs specifically
designed for children. The advertising message might be how much fun it is to eat this
cereal. To reach parents, print advertising in
magazines such as Family Circle or Parenting
might be used, and the ad message might
stress health benefits.
To develop a clear picture of their target
market, businesses create a customer profile.
A customer profile lists information about the
target market, such as age, income level, ethnic
background, occupation, attitudes, lifestyle,
and geographic residence. Chapter 2 focuses
on this aspect of marketing. Marketers spend
a lot of money and time on research to collect
data so that they understand the characteristics of their target market’s customer profile.
This information helps them make intelligent
marketing decisions.
An easy and fun way to understand customer profiles is to look at magazines. If you
thumb through a magazine’s articles and
advertisements, you will know who reads the
publication. According to Seventeen magazine’s
Web site, the magazine targets teen girls and
15
Targeting Children
You may have observed young children
mesmerized by television commercials or
seen children crying when a parent refuses to buy a product that a child had
seen advertised on television.
Messages to Children
Businesses that target young children
generally create images that their products are fun and enjoyable.
Messages to Parents
Some of these same companies target
parents and send a different message
about their products—stressing qualities
that parents deem important, such as
education, safety, or health.
use and control in order to influence potential
customers. Marketers control decisions about
each of the four Ps and base their decisions on
the people they want to win over and make
into customers. Because of the importance of
customers, some would add a fifth P to the
list: people. Marketers must first clearly define
each target market before they can develop
marketing strategies.
The four elements of the marketing mix
are interconnected. Actions in one area affect
decisions in another. Each strategy involves
making decisions about the best way to reach,
satisfy, and keep customers and the best way
to achieve the company’s goals.
Let’s look at what each marketing mix
component involves. Follow Figure 1.2
to see each of the four Ps illustrated and
explained for Tropicana’s Light ‘n Healthy®
brand orange juice.
Product
Do you think targeting children with
food products and toys is ethical?
Should advertising to children be
restricted? Why or why not?
Go to the Marketing Essentials OLC
through glencoe.com to find a project on
ethical marketing techniques.
young women who are interested in beauty,
fashion, and entertainment. It is larger than
any competitor in the 12- to 17-year-old market
and 97.9 percent of its readers have accessed
the Internet regularly.
Marketing Mix
The marketing mix includes four basic
marketing strategies called the four Ps: product, place, price, and promotion. These are
tools marketing professionals or businesses
16
Product decisions begin with choosing
what products to make and sell. Much research
goes into product design. A product’s features,
brand name, packaging, service, and warranty
are all part of the development. Companies
also need to decide what to do with products they currently sell. In some cases, those
products require updating or improvements
to be competitive. By developing new uses
and identifying new target markets, a company can extend the life of a product. In the
orange juice example illustrated in Figure 1.2,
Tropicana chose health conscious men and
women as the target market for a new
juice. It produced a lower-calorie, lowercarbohydrate orange juice and it selected a
name—Light ‘n Healthy—that would appeal
to its target market.
Place
The means of getting the product into
the consumer’s hands is the place factor of
the marketing mix. Knowing where one’s
customers shop helps marketers make the
place decision. Place strategies determine
glencoe.com
(tl) ©2004 Tropicana Products, Inc. All rights reserved. Reprinted by permission., (tr) Sky Bonillo/PhotoEdit, (bl) Tom Carter/PhotoEdit
1.2
Marketing Mix for a New Juice
•Light ‘n Healthy’s Four Ps Tropicana’s marketing department develops strategies for each brand of orange juice
in its product line. The four Ps of the marketing mix focus on the customer profile for a specific target market. The
Light ‘n Healthy brand targets men and women who are health conscious and want to stay physically fit.
Would you have made different choices about the four Ps to introduce this product? If so, what would you have
done differently?
PRODUCT
PL ACE
Product
decisions
include naming
the product and
deciding how to
match the target
market’s needs.
Tropicana’s
Light ‘n
Healthy brand
has a third less
sugar and a third
fewer calories
than regular orange juice.
Since most
people shop in
supermarkets for
orange juice, the
place decision was
an easy one.
PROMOTION
Tropicana decided to
run humorous ads in
Health magazine and on
television that showed
oranges exercising.
This
reinforced
the image it wanted
for its Light ‘n Healthy
brand.
PRICE
To be competitive,
Tropicana priced its
Light ‘n Healthy brand in
line with other premium
orange juices.
Go to Marketing Essentials OLC through glencoe.com
to find a project on the marketing mix.
glencoe.com
17
©Boost Mobile. All rights reserved. Reprinted by permission.
Pay as You Go Wireless Phones
The Roxy i830 phone from Boost is created for active and fashionable young women.
The Roxy brand represents freedom, fun, and individual expression, all of which are
reflected in the design and custom features of the Roxy phone.
The Right Ring Tones
The Roxy wireless phone features ring tones such as Funky Town, Girls Just Wanna
Have Fun, and other tunes. The phone is preloaded with Java™ games, including Tetris® and Snood® from THQ and Blazing Boards™ by Cybiko. The Roxy
i830 also features beach-themed displays. As with all Boost Mobile’s
models, the Roxy wireless phone comes with Boost 2WAY™, the longrange walkie-talkie feature.
Price and Place
Advertisements for the Roxy phone focus on girls involved in
sports. The suggested retail price is $199, which includes $25 in
wireless service credits that are loaded on activation. The limited
edition Roxy phone is available at select Quiksilver Boardrider
Club stores, select Surf & Specialty stores that carry the Quiksilver
and Roxy brands, as well as Best Buy, Good Guys, Wherehouse
Music, and Nextel Retail Stores. Boost Mobile customers pay for the
minutes only as they need them through the purchase of Re-Boost™
cards, which are available in $20, $30, and $50 denominations and may
be purchased as needed at all authorized Boost Mobile retailers (such as Nextel
and Target) and 7-Eleven stores.
Identify the target market and provide a customer profile for the Roxy brand
wireless phone. Explain Boost Mobile’s marketing mix decision (four Ps) for
the Roxy phone and its Mobile service.
Go to the Marketing Essentials OLC through glencoe.com to find
a research project on companies’ strengths and weaknesses.
how and where a product will be distributed. For global companies, it may mean
making decisions about which products
will be sold in which countries and which
retail outlets or other means of selling
the product will best reach the customer.
Can the product be sold directly to the
consumer, or are intermediaries necessary?
Other place decisions include deciding which
18
transportation methods and what stock
levels are most effective.
In the Tropicana orange juice example,
the place decision was to sell 64-fluid-ounce
containers of the Light ‘n Healthy brand in
food stores that have refrigerated cases. These
products are in supermarkets, convenience
stores, and mass merchandise retailers, such
as Smart & Final, Wal-Mart, or Costco.
glencoe.com
Price
Price is what is exchanged for the product.
Price strategies should reflect what customers
are willing and able to pay. To that end, marketers must consider the price they will charge
their industrial customers, including resellers.
Pricing decisions also take into account
prices that the competition charges for
comparable products.
Pricing Strategies
Price strategies therefore include arriving
at the list price or manufacturer’s suggested
retail price, as well as discounts, allowances, credit terms, and payment period for
industrial customers.
On occasion, a company may use special
promotional pricing that would adjust the
suggested retail price. A manufacturer may
decide to use a promotional price for a fixed
period of time, for example. This technique is
frequently used to launch new products.
Promotion
Promotion refers to activities related to
advertising, personal selling, sales promotion,
and publicity.
Promotional Strategies
Promotional strategies deal with how
potential customers will be told about a
company’s products, including the message,
the media selected, special offers, and the
timing of the promotional campaigns. Figure
1.2 highlights the Tropicana Light ‘n Healthy
ad campaign. In that campaign, images were
carefully created to match a key feature of the
product. Ads for orange juice with added calcium or vitamins might have different graphics and might run in different magazines.
1. What is the difference between consumer and industrial markets?
2. What is the relationship among market segmentation, target markets,
and customer profiles?
3. Name the four Ps of the marketing mix and explain the importance of a
target market for each of them.
Academic Skills
Math
4. If total sales in the ice cream category
were $4.4 billion and Breyers’ sales were
$650,417,792, what would be its market
share? Round your answer to the tenth
decimal place.
English Language Arts/Writing
5. Write a customer profile for a magazine of
your choice. Support your description by
describing sample articles and advertisements from the magazine.
Fractions, Decimals, and Rounding
Think of market share as a fraction of a
whole market that converts to a percentage.
1. Write total sales, $4.4 billion, as a
number.
2. Divide Breyers’ sales by the total sales.
3. Then round to the tenth decimal place.
glencoe.com
19
CHARLES SPIVEY
ARTIST DEVELOPMENT
MANAGER
What do you do at work?
Artist development is all about
helping my client take the next
step, depending on where
he or she is in his or her
music career. Some already
have a couple albums under
their belt, while others are
looking to record a first demo.
Fundamentally, I am a people
broker. If a client needs a new
Web site, I connect her to the
best Web people I know. If a singer needs a new headshot,
I hand him over to my best photographer. If a band needs
200 people at a show, I talk to every newspaper
Copy TK and radio
person I know and get them to push the band.
FPO -
Strong interpersonal skills,
resourcefulness, creativity,
contact management, and
organization
Courses English language
arts, math, business, music,
computer tech
Degrees High School, BA,
or MBA
Entry-level opportunities exist
for MBA graduates in virtually
every field you can imagine.
What skills are most important to you?
Growth about as fast as
People skills, without a doubt, are the most important
average for the next ten years
aspects of my job. I know that PR means public relations
but I think it means people relations. Know your clients,
Source: Occupational Outlook
Handbook
know your friends, and know your business partners.
They’re all people and want to be treated like people, not
profit centers. My undergraduate education had nothing to
do with music, PR, or management, but my MBA course load of marketing classes
has certainly paid big dividends. The best lessons I’ve learned have come from
other people in the business—people I admire and look up to.
What is your key to success?
It’s important to set high goals and be tenacious, but also have the ability to
accept failure and see it as an opportunity to grow. Sure I want to succeed every
time I pick up the phone to market my clients, but I have to be willing to accept
the rejection that often comes in the music business; I just dust myself off and
come back for more.
Why might MBA-level marketing courses
be helpful, even in a career that was not
specifically the focus of those courses?
20
Go to the Marketing Essentials OLC through
glencoe.com to find a career-related
activity.
glencoe.com
CHAPTER
1
REVIEW
SECTION 1.1
• Marketing is 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.
• There are seven marketing core functions. The marketing concept is a focus on
customers’ needs and wants while generating a profit.
SECTION 1.2
• Three benefits of marketing are new and improved products, lower prices, and added
value (utility). Five economic utilities are form, place, time, possession, and information.
SECTION 1.3
• A market is all the people who share similar needs and wants and who have the ability to
purchase given products.
• Market share is a firm’s percentage of total sales of all competitors in a given market.
• The four Ps of the marketing mix are product, place, price, and promotion. Marketing
decisions and strategies for the four Ps are based on the target market.
1. On a sheet of paper, use each of these key terms and academic vocabulary words in a written sentence.
Key Terms
Academic Vocabulary
•
•
•
•
•
marketing (p. 5)
goods and services (p. 5)
marketing concept (p. 7)
utility (p. 9)
market (p. 13)
•
•
•
•
consumer and industrial
markets (p. 13)
market share (p. 14)
customer profile (p. 15)
marketing mix (p. 16)
•
•
•
•
•
•
create (p. 5)
conduct (p. 6)
impact (p. 8)
benefit (p. 9)
similar (p. 13)
element (p.16)
2. Define the term marketing. (1.1)
7. What is a market? (1.3)
3. Identify four skills common in marketing and
8. In what ways can a market be identified?
business administration. (1.1)
4. List the seven marketing core functions.
(1.1)
5. Explain the marketing concept. (1.1)
6. What is meant by utility? (1.2)
(1.3)
9. What is market share? (1.3)
10. Define a target market. (1.3)
11. What are the four components of the
marketing mix? (1.3)
Chapter 1 —- Marketing Is All Around Us
21
CHAPTER
12.
13.
1
REVIEW
Workplace Skills
14.
Figure the Market Share Calculate Nikon’s
salesperson in a computer store. A customer
is hesitant about buying a mid-priced laptop
computer you are showing. The customer’s
objection is that it will sell for much less in a
year. Do you think the customer is correct?
What would you say?
market share if total sales in the digital
camera market are $211,464,600 and
Nikon’s sales are $120,305,671? Round
your answer to the tenth decimal place.
Technology Applications
problem, use the following formula:
Computing Precentages To solve this
Understanding Market Functions With two
or three classmates, use a word-processing
program to write a short report about a new
fruit beverage that you believe will be popular
with teenagers. Assume your team develops
this new product and wants to start selling it.
Consider all seven marketing core functions
in your report and explain how each applies to
the marketing of your new product.
16.
Math Practice
The Right Choice Assume you are a
Marketing Concepts
Select a product that you have recently
purchased or a product that interests you.
Research (on the Internet, in magazines and
newspapers) what type of marketing has been
done for this product. List all the examples
you can find. Do you think they were good
marketing ideas? Why or why not?
Company’s Sales / Whole Market’s Sales =
Company’s Market Share
15.
Social Studies/History
Advertising Timeline In the mid 1850s,
circus entrepreneur and promoter P.T. Barnum
created some of the most effective ad
campaigns of the day, using newspapers ads,
handbills, and posters. American marketing
and advertising has a colorful history.
Research significant events in advertising
history from 1800 to the present. Create a
timeline on a posterboard and display it in
your classroom.
17.
Understand Target Markets
and the Marketing Mix
Select an existing product that interests you.
Look at how it is advertised in print or on
television and the Internet. Research your
product’s price and where it is sold. Identify
its target market and the four Ps of its
marketing mix. Then change the target market
for the product.
Activity Show how the four Ps must be
revised. Prepare a written report and an oral
presentation using presentation software.
22
CHAPTER
18.
2.
REVIEW
Check an Online Dictionary
Visit the American Marketing Association’s
(AMA) Web site and use its online dictionary
to review its most current definition of
marketing, as well as other key marketing
terms that are covered in this chapter.
1.
1
Directions Choose the letter of the best
answer. Write the letter for the answer on
a separate piece of paper.
What percent of 39 is 13?
A 3%
B 30%
C 33.33%
D 300%
Directions Choose either T for True or F
for False as the answer. Write the letter for
the answer on a separate piece of paper.
The four Ps of marketing consist of
product, price, planning, and promotion.
T
F
Role Play
The Importance of Marketing
Situation You are to assume the role of a
high school marketing student. Your sister
(judge) designs and makes purses that she
has been selling to friends and family. Your
sister (judge) is now considering opening a
business to sell her purses.
Activity You are to explain to your sister
(judge) about marketing and creating a
marketing plan. You should also explain
marketing in general. In your explanation, also
include the importance of a marketing plan
and the components of a marketing plan.
Relate how these can affect the success of a
business.
Evaluation You will be evaluated on how well
you meet the following performance indicators:
• Describe marketing functions and related
activities.
• Explain the nature of marketing plans.
• Select a target market.
• Set marketing
Test-Taking Tip
When you sit down to take a math test, jot
down important equations or formulas on
scrap paper. This way, you will not forget
them during the test.
goals and
objectives.
• Develop a
marketing plan.
For more information and DECA Prep
practice, go to the Marketing Essentials OLC
through glencoe.com.
glencoe.com
Chapter 1 —- Marketing Is All Around Us
23

- Fairview High School

Transcription

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