Principles of Business Finance and Marketing
Unit 4 – Marketing
Section 4.01 – Marketing Basics
NOTES
American Marketing Association (AMA) definition of marketing: The activity
,set of
institutions, and process
for creating, communicating, delivering, and exchanging
offerings that have value
for customers, clients, partners, and society at large
 Marketing is used to

Identify
the customer

Satisfy
the customer

Keep
the customer
7 Marketing Functions
 Product & Service Management

Designing
, developing, maintaining, improving
, and
acquiring products and services that meet consumer needs

i.e. creating new products
 Distribution

Determining the best ways for customers to locate
use the products and services of an organization

i.e. shipping, handling, and storing of products
, obtain, and
 Selling

Communicating directly with potential customers
satisfy their need

i.e. face to face
to determine and
or telemarketing
 Marketing-Information Management

Obtaining, managing, and using market information to improve
business decision-making and the performance of marketing activities

i.e. market research, database management
 Pricing

Setting and communicating the value

i.e. low enough that customers willing to pay, high enough for a business
to make a profit
of products and services
Section 4.01 – Marketing Basics
NOTES
 Financial Analysis

Budgeting
for marketing activities, obtaining the necessary
funds
needed for operations, and providing financial assistance
to customers so they can purchase the business’ products and
services

i.e. credit card payment systems
 Promotion

Communicating information about products and services
potential customers

i.e. advertising
to
 Most visible form of marketing
 In 2010, US spent $300 Billion on advertising
 Worldwide, over $500 Billion spent on advertising
Marketing Strategy - A company’s plan that identifies how it will use marketing to
achieve its goals


Fun Fact: Marketing activities often cost 50% or more of the selling price of a
product or service
Two step process
o Target Market 



: The location, size of the area, density, and
climate zone of your customers.
: The age, gender, income, family composition
and size, occupation, and education of your customers.
: The general personality, behavior, life-style,
rate of use, repetition of need, benefits sought, and loyalty
characteristics of your customers.
: The needs they seek to fulfill, the level of
knowledge, information sources, attitude, use or response to a
product of your customers.
o Marketing Mix - The blending of four marketing elements – product,
placement (distribution), price, and promotion
 The 4Ps: product , price
, place
, promotion
Section 4.01 – Marketing Basics
NOTES
Two Types of Customers
Business to Consumer (B2C)

Persons who buy products and services mostly for their own use

Played a large role in the rapid development of the commercial Internet in the
1990s

2011 estimates e-commerce will generate $680 Billion
worldwide
Business to Business (B2B)

Persons, companies, and organizations that buy products for the operation of a
business, for incorporation into other products and services, or for resale to their
customers
Customer Decision Making Process - The specific sequence of steps consumers
follow to make a purchase
5 Steps:
1.
Recognize a need
2.
Gather information
3.
Select and evaluate alternatives
4.
Make a purchase decision
5.
Determine the effectiveness of the decision
Buying Motives: Reasons consumers decide what products and services to
purchase
 Emotional Buying Motives – reasons to purchase based on feelings, beliefs, and
attitudes
 Rational Buying Motives – guided by facts and logic