Unit 1: The Definition and Principles of Marketing
Many people incorrectly believe that marketing and advertising are the same. In reality, advertising is just one of many tools used in marketing, which is how firms determine which products to offer, how to price those products, and who they should be made available to. We will explore ways marketing departments and independent agencies answer these questions, whether through research, analysis, or trial and error. Once a company identifies its customer and product, marketers must determine the best way to capture the customer's attention. Grabbing the customer's attention may entail undercutting competitors' prices, aggressively marketing with promotions and advertising (like "As Seen on TV" ads), or targeting ideal customers. The strategy a marketing firm chooses for a particular product is vital to the product's success. The idea that "great products sell themselves" is simply not true. By the end of this course, you will be familiar with the art and science of marketing a product.
Completing this unit should take you approximately 6 hours.
Upon successful completion of this unit, you will be able to:
- explain the function of marketing in society;
- explain the 4 Ps of marketing; and
- define advertising and sales.
- explain the function of marketing in society;
1.1: Marketing Basics
Read this chapter, which defines and discusses the four components of marketing, identifies the various institutions and entities that engage in marketing activities, and emphasizes the importance of marketing in society. This chapter also outlines the marketing plan.
- Watch this video, which summarizes the fundamentals of marketing terminology and practices. Many of these terms and concepts are deeply rooted in the foundations and traditions of marketing. Please pay extra attention to the fundamental concepts of "The Four Ps" of the marketing mix: product, price, place, and promotion. These topics are critical when defining public relations audiences and the methods to reach them.
1.2: The Marketing Mix ("The 4 Ps")
Read this section, which will reinforce your understanding of the marketing mix. Select a company like Starbucks and identify their marketing objectives at the corporate level, which will include profitability, cost savings, growth, market share improvement, risk containment, reputation. As a marketer, think about how you will use the marketing mix to achieve these objectives and turn them into actionable steps. As you read each section of the marketing mix, identify actions that have been developed by marketers for your selected company.
Read this chapter. Pay attention to the section on managing new products and the product life cycle, and watch the videos.
Read this chapter. Pricing is a difficult issue because most products will sell at some volume at just about any price level. Some customers are willing to pay almost any price for a specific product, but how many of those customers exist? Marketers could consider a value-priced model, but this may make the product's price so low that there is no way to profit. One common pricing strategy is known as "the loss leader", which involves selling one product below the cost to manufacture it to get it in customers' hands. They make up for this loss later with complementary goods. This is commonly seen in video game console sales. Console system manufacturers like Sony and Nintendo will price the system below the cost to manufacture it. Consumers adopt the systems due to the attractive price point, and the manufacturer makes up for the initial loss on the system with sales of proprietary accessories and video games.
- Read this chapter for a thorough treatment of the critical concept of price, which the authors note is the only means a company has of generating revenue. This chapter discusses the process companies must go through to effectively price their offerings, including identifying pricing objectives, accounting for the factors that affect pricing decisions, and implementing a pricing strategy. Pay attention to concepts of pricing basics, value pricing, target pricing, price sensitivity and elasticity, dynamic pricing, rack pricing, and loss leaders.
Read this article, which discusses price, impacts on the price point, the effects of demand and competition on price, how economic concepts of substitution and elasticity impact price, and pricing psychology.
- Read this section. Think about the pressures of competition and how a firm can achieve and protect its position in the market.
Listen to this lecture, which gives more marketing information, including public relations, trade shows, events, and seminar selling. Promotion is an all-important aspect of marketing, and we will revisit this topic later in the course.
- Read this chapter, which discusses the different methods of communication employed by businesses to reach their customers, the types of message strategies commonly used, and budgetary issues that companies must consider. Among this chapter's key takeaways, you will learn that as the media landscape changes, marketers may change the type of promotions they use to reach their target markets. With changing technology and social media, less money is being budgeted for traditional media like magazines, and more money is budgeted for "new media". Regardless of the type of media used, marketers use integrated marketing communications (IMC) to deliver one consistent message to buyers.
Read about the difference between advertising and marketing. From your previous reading in this unit, you know that advertising is an element of marketing. This text provides additional guidelines that marketers must consider when developing communication strategies for an integrated marketing communication campaign.
- Read this article, which discusses achieving marketing success by emotionally connecting customers to products, piquing the interest of target media, and creating a media hook through innovation rather than imitation.
Unit 1 Discussion
After reviewing the unit materials, post and explore the discussion forum. Feel free to start your own post and respond to other students' posts as well.
Think of a company or social campaign that has caught your attention and assess it by using the 4 Ps of marketing (product, place, price, and promotion). Pick a product, service, or issue for which you might develop a marketing campaign. What are the first issues you need to address according to the fundamental rules of marketing? Beyond the topics covered in this unit, what would you suggest are other issues marketers should keep in mind in the twenty-first century marketplace as they launch a campaign?