Unit 1: The Definition and Principles of Marketing
We will begin with the basics of marketing. In this unit, we will define a number of important terms and distinguish between marketing, advertising, and sales. Advertising and sales are two aspects of marketing, but they come into play much later in the marketing strategy process. Companies focus on sales and advertising only after all other factors of marketing have been determined. This unit will teach you that marketing departments focus on a set of core principles, most of which are summarized by the 4 Ps (product, price, place, and promotion).
The 4 Ps are also known as the marketing mix. Marketers use the marketing mix to determine the proper strategy for a product. For example, if an inventor comes to you with a new touchscreen technology, how do you sell it? You might first find a product in which the touchscreen would be useful, such as a phone, then determine a target price to maximize sales, identify the best place to sell it (e.g. online or in a store), and finally decide how to promote it. Applying the 4 Ps in this situation could give you the next iPhone.
Completing this unit should take you approximately 10 hours.
Upon successful completion of this unit, you will be able to:
- define marketing and explain its function in society;
- explain the 4 Ps of marketing;
- define advertising and sales; and
- describe ethical issues in marketing.
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 and introduces future chapters as they relate to the marketing plan structure.
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. Pay extra attention to the key 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. You may read along with the transcript here.
1.2: The Marketing Mix (The 4 Ps)
Read the Marketing Mix section, starting at the bottom of page 1, which will reinforce your understanding of the marketing mix.
1.2.1: Product
Read this chapter. Pay special attention to the section on managing new products and the product life cycle. Also, watch the embedded videos.
1.2.2: Price
Read this chapter. Pricing is a difficult issue because most products will sell at some volume at just about any price level. Certain 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 make a profit on it. 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 the hands of customers. 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. As consumers adopt the systems due to the attractive price point, 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 important 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 the psychology of pricing.
1.2.3: Place
1.2.4: Promotion Tools and Tactics
Listen to this lecture on 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.
1.2.5: Marketing vs. Advertising
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 must be considered. Among this chapter's key takeaways, you will learn that as the media landscape changes, marketers may change the type of promotions they use in order 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 as part of 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. You may also refer to this article on Differentiation Strategies.
Unit 1 Discussion and Assessment
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?
- Receive a grade Receive a pass grade
Take this assessment to see how well you understood this unit.
- This assessment does not count towards your grade. It is just for practice!
- You will see the correct answers when you submit your answers. Use this to help you study for the final exam!
- You can take this assessment as many times as you want, whenever you want.
