BUS602: Marketing Management

Product and service promotion is key to effective marketing. Many people think that "marketing" is promotion. Informed students of marketing know differently. However, consider the impact of promotion on our daily lives. We wake up in the morning and listen to promotional messages on the radio and TV. We check our emails, use the internet, and receive promotional messages. We travel to work or school and see billboards along the way. We sometimes find ourselves humming tunes to promotional messages using music.

Marketers need to know that even though your offering (product or service) may be superior to all competing products, you cannot sell it if people do not know about it. Word of mouth referrals have worked for centuries and still work, but to a lesser extent than they did hundreds of years ago. Today we have a global economy with a hypercompetitive business environment. This requires the marketer to inform the consumer and prospective consumer about the product or service offering and the features, advantages, and benefits that the offering provides to the consumer.

As consumers, we have observed various pricing methods while shopping for our own goods and services. As marketers we must develop a pricing strategy. The pricing strategy must address the objectives that we intend to accomplish. For example, are we interested in obtaining greater market share, or are we pricing for high profitability, or introducing a new product to attract consumers with an introductory low price?

Break-even analysis, also referred to as cost, volume, profit analysis, is explained in the Principles of Marketing textbook in section 15.2, which you already read (feel free to go back and review!). This concept is important to marketing, but it is also important in understanding how a business works. All businesses have break-even points. It is useful to know that a break-even point is determined over a period, such as a year, quarter, a month, or a week. Marketing managers who stay on top of financials are better informed and can make better marketing decisions.

Students who have taken a course in economics will understand the concepts of supply and demand. Furthermore, we know that the demand curve is an inverse curve that explains a consumer's demand (or willingness to pay, WTP) for a product or service. Therefore, the higher the price, the lower the willingness to pay, and vice versa.

Demand curves, although theoretical, hold for products and services. However, the slope or shape of the demand curve varies according to the product or service offered. We know, from economics, that the intersection of the demand and supply curves is called the equilibrium point. This is where the business is transacted.

Marketers generally do not talk about the equilibrium point or equilibrium price. Rather, marketers talk about the market price, or the price generally paid in the market for a good or service. The market price is like the equilibrium price, which can be observed by seeing what prices are actually paid for a good or service.

This review video is an excellent way to review what you've learned so far and is presented by one of the professors who created the course.