Marketing II

Vocabulary

		to develop — разрабатывать
		to satisfy the needs — удовлетворять потребности
		marketing concept — концепция маркетинга
		marketer — маркетолог
		to generate revenue — приносить доход
		marketing effort — меры по организации и стимулированию сбыта
		marketing research — маркетинговое исследование
		to collect data — собирать информацию (данные)
		target consumers, target market — целевые покупатели, целевой рынок
		marketing mix — комплекс маркетинга
		brand name — марка, фирменный знак
		packaging - упаковка, подготовка товара к доставке и реализации
		pricing — ценообразование
		channels of distribution — каналы распределения товаров и услуг
		door-to-door marketing — квартирный маркетинг
		to increase sales, to promote sales — увеличить объем продаж, стимулировать продажи (сбыт)
		potential customers — потенциальные потребители
		to design a product/a service-проектировать товар/услугу

Vocabulary notes

		in terms of something — с точки зрения чего-либо
		physical — зд. материальный
		is commonly referred to as… — обычно называется…

Answer the following questions based on the text.

1. What is marketing?

2. When and why was the marketing concept adopted?

3. What is marketing management? What does it include?

4. What aspects of the product enable consumers to satisfy their needs?

5. Which element of the marketing mix generates revenue?

6. What are channels of distribution?

The term market is the root word for the word marketing. Market refers to the location where exchanges between buyers and seller occur. Marketing pertains to the interactive process that requires developing, pricing, placing, and promoting goods, ideas, or services in order to facilitate exchanges between customers and sellers to satisfy the needs and wants of customers.

Needs are the basic items required for human survival and are often described as a state of real or perceived deprivation. Needs are translated into wants that are shaped by both cultural influences and individual preferences. Therefore, the purpose of marketing is to convert these generic needs into wants for specific goods, ideas, or services.

The earliest form of exchange was known as barter. Modern marketing began in the early 1900s. In the twentieth century, the marketing process progressed through three distinct eras – production, sales, and marketing. In the 1920s, firms operated under the premise that production was a seller’s market. Product choices were nearly nonexistent because firm mangers believed that a superior product will sell for itself. This philosophy was possible because the demand outlasted supply. During this era, firm success was measured totally in terms of production. The second era of marketing, ushered in during the 1950s, is known as the sales era when product supply exceeded demand. Thus, firms assumed that consumers would resist buying goods and services deemed nonessential. To overcome this consumer resistance, sellers had to employ creative advertising and skillful personal selling in order to get consumers to buy. The marketing era emerged after firm managers realized that a better strategy was needed to attract and keep customers. The marketing concept philosophy was adopted. This consumer-oriented idea was that a firm trying to achieve its goal had to satisfy the needs and wants of consumers. At the present stage of the evolution the marketing concept is giving way to the societal marketing designed both to achieve a company’s well being and to provide for society’s welfare.

There are four areas of operation within all firms: accounting, finance, management, and marketing. Each of these areas performs specific functions. Marketing is responsible for generating revenue through the exchange process. As a means of generating revenue, marketing objectives are established in alignment with the overall objectives of the firm. It is completed through the process of marketing management, which involves developing objectives to promote the long-term competitive advantage of a firm. The first step in the market management process is to develop the firm’s overall strategic plan, the second step is to establish marketing strategies, and lastly, a marketing plan is developed for each product. The market management process includes analyzing marketing opportunities, selecting target markets, developing the market mix, and managing the marketing effort. Various quantitative and qualitative techniques of marketing research are used to collect data about potential customers, who are then segmented into markets.

The process of placing consumers into groups is called market segmentation in which potential customers are categorized based on different needs, characteristics, or behaviors. Market segments are evaluated as to their attractiveness for generating revenue for the firm.

Once the potential market has been segmented, firms need to station their products relative to similar products of other producers, a process called product positioning. Market positioning is the process of arranging a product so as to engage the minds of target consumers. Firm managers position their products in such a way as to distinguish it from those of competitors in order to gain a competitive advantage in the marketplace.

After determining a positioning strategy marketing managers seek to control the four basic elements of the marketing mix: product, price, place, and promotion, known as the four P’s of marketing.

The product, in marketing terms, is defined as anything tangible (a physical product) or intangible (a service product) that capable of satisfying needs. This satisfaction people get from products can derive from any aspect of the product, such as its quality, brand name, service warranty and guarantees, package, supplementary use, or even symbolic value. In creating a competitive product, professional marketers must choose features that are preferred and expected by target customers, or the product will not be valued in the marketplace. For example, the importance of packaging and branding in the distribution of the product has increased with the spread of self-service purchases – in wholesaling as well as in retailing.

The price that customers pay for a product influences the product’s image and likelihood of purchase. It is the only revenue-generating element of the marketing mix and the easiest to change. There are a number of pricing strategies available to marketing managers: skimming, penetration, quantity, and psychological. With a price-skimming strategy, the price is initially set high, allowing firms to generate maximum profits from customers willing to pay the high price. Prices are then gradually lowered until maximum profit is received from each level of consumer. Penetration pricing is used when firms set low prices in order to capture a large share of a market quickly. A quantity pricing strategy provides lower prices to consumers who purchase larger quantities of a product. Psychological pricing tends to focus on consumer perceptions. For example, odd pricing is a common psychological pricing strategy. With odd pricing, the cost of the product may be a few cents lower than a full dollar value. Consumers tend to focus on the lower-value full-dollar cost even though it is really priced closer to the next higher full-dollar amount. That is, if a good is priced at $19.95, consumers will focus on $19 rather than $20.

Place, or where the product is made available, is most commonly referred to as distribution. When a product moves along its path from producer to consumer, it is said to be following a channel of distribution. To deliver goods to ultimate consumers, manufacturers may use two types of marketing: multilevel marketing and direct marketing. The use of the first type means to employ intermediaries, but in this case, manufacturers lose control over sales and do not receive some profit because they have to pay the intermediaries for their work. If the sellers decide to skip steps in the channel they will market directly to buyers through direct marketing. Direct marketing consist of database marketing, which provides seller with information about his potential customers, direct mail marketing, when the seller’s offer and the purchase are made through mail, catalogue marketing, marketing with the help of telephone, television, and the Internet, door-to-door marketing, which means visiting each house in a street or area to sell goods and services.

The last variable of the marketing mix is promotion. It is a set of activities done in order to increase the sales. Various promotional tools are used to communicate messages about the features and benefits of products or services from firms to their customers. The promotional tools available to managers are advertising, personal selling, sales promotion, and publicity. For the promotional program to be effective, managers use a blend of the four promotional tools that best reaches potential customers.

One of the main keys to the success of any marketing program is the ability of marketing managers to work effectively with other team members to shape marketing mixes that meet the nature and needs of specific target markets