Marketing Fundamentals and Economic Principles

Core Marketing Concepts

Marketing refers to dynamic activities focused on the customer to meet needs and wants while creating a profitable exchange.

Dynamic: Marketing is constantly changing because customers, technology, the economy, and trends are always in flux.

Need: Something necessary for survival.
Want: Something desired but not essential.

Identifying Customers and Target Markets

Customer Types: These include individuals, businesses, organizations, and government entities.

Target Market: This is the specific group of customers a company focuses on satisfying.

The Marketing Mix: The 4 Ps

• Product: A good, service, or idea.
• Price: The amount of money exchanged for a product.
• Place: When, where, and how customers get the product; this includes shipping, storing, inventory, stocking, and the internet.
• Promotion: Communicating about the product or company.
  • Selling
  • Advertising
  • Publicity

Strategic Marketing Planning

A comprehensive Marketing Plan consists of the following steps:

1. Market Opportunities & Analysis: Assessing the current situation and performing a SWOT analysis.
2. Market Strategy: Defining goals and objectives, the target market, the marketing mix, and the position statement.
3. Action Plan: Establishing a timeline, specific activities, and a budget.
4. Monitor & Evaluate: Reviewing sales and results, forecasting, and adjusting the plan as needed.

SWOT Analysis: This stands for Strengths, Weaknesses, Opportunities, and Threats.

Core Business Functions

There are four primary business functions: Production, Finance, Marketing, and Management.

• Loans and equipment fall under Finance.
• Customer satisfaction falls under Marketing.

Economic Foundations

Profit: Calculated as Sales − Expenses/Costs.

Profit Motive: The internal drive to earn more profit.

Scarcity: The condition of not having enough resources to meet all needs and wants.

The Three Economic Questions

Every system must answer: What to produce? How to produce? Who gets it?

Types of Economic Systems

• Traditional: Based on traditions and elders.
• Command: Controlled by the government.
• Market: Driven by individuals.
• Mixed: A combination of government and individual control.

Understanding Supply and Demand

Demand: The quantity a customer is able and willing to buy at a certain price.

Market Demand: The total demand of all buyers in a market.

Supply: The quantity suppliers are willing to provide at a certain price.

Market Supply: The total supply of all suppliers in a market.

The Laws of Economics

Law of Demand: As Price ↑, Demand ↓ | As Price ↓, Demand ↑

Law of Supply: As Price ↑, Supply ↑ | As Price ↓, Supply ↓

Market Effects on Price

• High Demand + Low Supply → Price ↑
• Low Demand + High Supply → Price ↓
• High Demand + High Supply → No effect*
• Low Demand + Low Supply → No effect*

*Use this wording because that's how your class slide presents it.

Practical Application and Case Studies

When analyzing a case study, look for: Target Market → 4 Ps → Scarcity → Supply/Demand → Price → Profit.

In the first paragraph, identify and explain the course concepts. In the second paragraph, explain what the business should do and why.

Essential Concepts to Memorize

• 4 Ps: Product, Price, Place, Promotion
• SWOT: Strengths, Weaknesses, Opportunities, Threats
• Marketing Plan: Analyze → Strategize → Act → Evaluate
• Scarcity: Limited resources
• Economic Questions: What? How? Who?
• Demand: Able + willing
• Profit: Sales − Expenses
• High demand + low supply: Price ↑