Valery Bondarenko.

Marketing and Pricing





Valery Bondarenko,2017


ISBN978-5-4485-6430-7

Ridero

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CONTENT

Explanatorynote

SECTION 1. MARKETING

THEME 1. MODERN CONCEPT OFMARKETING

1. Marketing as abusiness philosophy

2. Basic concepts and scope ofmarketing

3. The principles ofmarketing and its functions

4. The structure of(complex) marketing


THEME 2. MARKETING RESEARCH

1. Marketing information system

2The essence ofmarketing research

3. Market research

THEME 3. CONSUMER BEHAVIOR AND CUSTOMERS

1The behavior ofbuyers inthe consumer market

2. The behavior ofbuyers inthe market enterprises

3. Consumer protection


THEME 4. COMMODITY POLICY

1. The essence ofcommodity policy

2. The essence ofthe product and its classification

3. Trading range and variety ofproducts

4. The process ofdeveloping new products and planning their life cycle


THEME 5.

DISTRIBUTION POLICY

1. Purpose, Structure and function ofthe distribution system.

2. Types ofdistribution channels

3Management ofthe distribution channels


THEME 6. PROMOTION POLICY

1.The essence ofcommunication policy

2. The main tools ofcommunication policy

3. Budgeting and performance evaluation ofcommunication policy


THEME 7. Department ofMarketing

1. The essence ofmanagement based on marketing

2. Marketing planning

3. The organization ofmarketing inbusiness

4. Control ofmarketing activities


SECTION 2PRICING

THEME 9. THEORETICAL BASIS OFPRICING

1. The evolution ofthe theory ofpricing

2. The concept ofpricing inthe Republic ofBelarus

3. Pricing policy


THEME 10. PRICES INTHE MECHANISM OFTHE ECONOMY

1. The economic content ofprices.

2. Factors that impact on prices.

3. Price system

4. Classification ofprices.


THEME 11. State regulation ofprices inthe Republic ofBelarus

1The need for state regulation ofprices

2. Methods ofstate regulation ofprices: indirect and direct

3. The policy ofstate regulation, carried out inthe Republic ofBelarus

4. Antitrustlaws


THEME 12. METHODS AND PRICING STRATEGY

1. Pricing methods based on production costs

2. Methods ofpricing, quality-oriented and consumer product properties

3. Methods ofpricing, demand-driven, the level ofcompetition

4. Market-based pricing strategy

THEME 13. PRICES INECONOMICS OFBUSINESS

1. Selling price ofthe enterprise and the order ofits formation

2. Features ofpricing inthe market ofconsumer goods and services


THEME 14. PRICING INMARKETING COMPANY

1. Technology justify prices inthe marketing business

2. The information needed tomake decisions on prices

3. Study ofconsumer response toprice changes

Literatures

EXPLANATORYNOTE

Apostgraduate ofdegree Master ofEconomics must have the following competences:

academic competences science, theoretical, methodological knowledge and research skills providing elaboration ofresearch projects or solving tasks for scientific research, innovative activity, continuous self-education;

social and personal competences personal qualities and skills for following social, cultural, and moral values, social responsibility;

professional competences skills and abilities tosolve complicated professional problems inresearch and educational activity, toelaborate and adopt innovative projects.

Master should be ableto:

Togenerate new ideas.

Toacquire new knowledge and skills independently, including the areas ofknowledge that are not directly related tothe field ofactivity.

Totake the initiative, including the situations ofrisk, totake responsibility, toresolve problem situations.

The requirements are for Masters social and personal competencies

Master should be ableto:

Tobe able totake into account the social, moral and ethical standards insocial and professional activities.

Tobe able tocooperate and work as ateam.

Touse one ofthe state languages ofthe Republic ofBelarus and any foreign language as ameans ofbusiness communication.

Togenerate and argue personal judgment and professional position.

Touse logical, reasoned, clear oral and written language, touse the skills ofpublic speaking, conducting discussion and debates.

Towork as ateam, tolead and toobey.

Torespect and protect the historical heritage and cultural traditions, toperceive social and cultural differences tolerantly.

Totake the initiative and creativity, including unusual situations.

Toadapt tonew situations ofsocial and professional activities, toimplement the experience, possibilities.

The requirements are for Masters professional competence

Master should be ableto:

Organizational-administrative activity

Assess the process taking place ininternational economy, identify trends and prospects.

Analyze and develop recommendations toimprove the national development strategy.

Use elements ofeconomic analysis inorganizing ofpractice inthe workplace.

Translation activities

Topossess modern means oftelecommunications.

Tokeep professional, social and cultural communication inaforeign language.

The implementation ofthese competences while studying the course Current Global Issues envisages the following tasks:

knowledge and understanding ofthe concept global issues;

awareness ofexisting global problems;

having deep information about main historical events and tendencies which lead tothe emergence ofglobal problems;

analyzing current world political, economic, social, and cultural developments;

understanding the essence and main directions ofglobalization process, its positive and negative aspects;

understanding the essence and content ofthe main current global issues;

realizing interconnections and interactions between global problems and national and world economies state and trends ofdevelopment;

knowledge ofthe role and activities ofinternational organizations for overcoming global issues.

knowledge ofthe contents ofmain international programs for solving global issues;

realizing manifestations ofglobal issues innative countries ofastudent;

skills and willingness tomake personal contribution inovercoming global problems after taking position according toobtained degree.

As aresult ofthe discipline studying the masters students should

know:

the subject and methodology ofthe discipline;

concept and evolution stages ofthe world economy theory;

structure and development trends ofthe world economy;

concept ofthe international division oflabour, its special aspects incurrent conditions;

subject-matter ofinternationalization, transnationalization and globalization;

substance ofinternational economic integration and its forms, special aspects ofintegration process inthe world economy;

content ofinternational currency relations and their components;

up-to-date theory and practice ofmacroeconomic regulation inopen economy.

be ableto:

estimate processes taking place inthe world economy;

determine development trends and prospects for countries, groups ofcountries and the world economy;

analyse position ofthe country ininternational division oflabour, degree ofopenness ofan economy;

use concepts ofthe international division oflabour and international trade;

estimate critically conditions offoreign economic relations and determine advanced directions for national economy participation inthe world economic relation.

SECTION 1. MARKETING

THEME 1. MODERN CONCEPT OFMARKETING

1. Marketing as abusiness philosophy

At the core ofthe term marketing is the word market, which means the market. So, inthe marketing one often understands the philosophy ofgovernance, economic conditions inthe market, proclaiming the orientation ofthe production tomeet the needs ofspecific customers.

Marketing under its widest sense is asocial and managerial process bywhich individuals and groups ofpeople get what they need bycreating products and exchanging them. When aperson is unable tomeet any need, he substitutes them or reduce the level ofhis requests.


EVOLUTION OFMARKETING

Phase Period Characteristics

I. beginning the twentieth century40th

Marketing had asales character. The motto: Everything produced must be sold. Sales methods ofmarketing and advertising were applied

II. 50years first half70s

Marketing has been focused on the study ofthe market and customer demands.

The principle is: It is advantageous toproduce the products that will be indemand than toproduce something that struggles tosell.

III. second half 70s till present

Integrated market system covers the entire cycle ofdevelopment, production and sale ofgoods, including market research, implementation ofmerchandise, pricing, communication and policy, strategic marketing governance and other marketing techniques

Thus, the requirements are translated into specific desires, which inview ofmonetary opportunities are transformed into market demand on the specific products. It appears the exchange between producers and consumers made out inthe form ofaparticular transaction. It follows that the direct marketing economy tomeet the constantly changing needs ofthe many millions ofconsumers.

Inother words, the marketing is aphilosophy ofmanagement, direction ofits implementation, when the resolution ofconsumer problems leads tothe success ofthe organization and brings benefit tothe society.

At the level ofindividual economic entities marketing is defined as acomplete system for planning the variety and quantity ofproduced products, pricing, distribution ofproducts between the chosen markets and topromote their sales inorder toachieve the diversity ofbenefits, led tothe satisfaction ofthe interests ofboth producers and consumers. This definition has asufficiently broad sense, as it covers the activities ofnon-profit organizations. Thus, marketing is the activity ofthe organization for the benefit ofits customers.

Inamore narrow sense (entrepreneurial) the marketing can be classified as amanagement system ofproduction and sales management organization aimed at obtaining an acceptable value profit through accounting and active influence on market conditions.

From the above it follows that avariety ofmarketing applications causes avariety ofits definitions.

It seems that as afairly general definition ofmarketing can be offered. Marketing is aform ofhuman activity tomeet the demand for the material and non-material, social, value through mutually beneficial exchange.

Thus, marketing is also asystem ofthought and action system.

2.Basic concepts and scope ofmarketing

The concept ofneeds is at the core oftheories ofmotivation (Freud, Maslow, etc.), determining the behavior ofconsumers inthe market. The main task ofmarketing is tofind aneed and meetit.

Desire is the need totake concrete shape inaccordance with the level ofculture and personality ofthe individual. Sometimes it is called concretized need. For example, the total demand for food is transformed into amore private demand inthe fruit, which, inturn, concretized results inthe need, the desire tobuy apples.

Demand is adesire, aspecific need, backed bypurchasing power. For given resource capabilities people satisfy their needs and desires through the purchase ofgoods that bring them the greatest benefit and satisfaction.

Product is all that can be offered on the market for the acquisition, use or consumption inorder tomeet specific needs.

Product is all that can satisfy any needs (physical goods, services, people, organizations, activities, ideas). Inthe literature on marketing the English term product is often translated as goods. It is understood that the product manufactured bythe manufacturer, with translational division bybecoming acommodity market.

Exchange is the act ofobtaining adesired product from someone byoffering him something inreturn. Exchange is just one ofthe many ways means ofwhich people get the desired product. Another way is hunting, gardening. This includes theft and begging.

The deal is trading between the two sides, including at least two subjects ofinterest and agreement on the terms, timing and months, those ofits implementation. There are two types oftransactions: cash transaction when goods are exchanged for money and barter transaction. The deal involves the performance ofthe following conditions: the presence ofat least two products representing the interest for the mutual exchange, the agreed conditions, time and place ofits commission.

The market inthe marketing sense is acollection ofexisting or potential sellers and buyers ofany products; its aplace where deals are made. It is on the market the manufactured product and labor on it expended prove their social importance, acquire recognition among consumers. Inmodern society, the market does not necessarily have aphysical location. Todemonstrate the product, its advertising and getting the orders modern means ofcommunication, without physical contact with customers are widely used. (Inmarketing, the market is the set ofconsumers ofaparticular product, they say, the market ofmetal, grain, etc. On the basis ofthis principle market segmentation is often carried).

3.The principles ofmarketing and its functions

There are the following marketing principles:

1. Careful consideration indeciding the needs, conditions and dynamics ofdemand and market conditions.

Adherence tothis principle requires agood knowledge ofthe market situation and on the existing estimates ofexpected demand, activities ofcompetitors inthe market, the market behavior ofconsumers and ofthe ratio ofthe products ofthis company and its competitors.

2. Creating the conditions for maximum device production tomarket demand, the structure ofdemand based not on short-term gain and long-term perspective.

The modern concept ofmarketing is that all activities ofthe company (scientific, technical, manufacturing, marketing, etc.) were based on knowledge ofconsumer demand and changes inperspective.

3. Toinform potential customers about the products and the impact on the organization ofconsumers using all available means, first ofall advertising, inorder toinduce them topurchase exactly the product.

The marketing function

Formation ofTrade Policy

The development ofthe concept ofcommodity

Formation ofassortment;

Taking into account the life cycle ofthe goods;

Competitiveness;

Creation ofproduct attributes;

Development ofnew products,etc.

Implementation ofthe marketing policy

The definition ofthe concept ofmarketing;

Select the channel distribution;

Formation ofdistribution;

Control ofproduct distribution processes,etc

The organization ofcommunication policy

The organization ofadvertising;

Public Relations;

Personal selling;

Sales promotion,etc.

Strategic management ofbranding

Planning ofmarketing activities;

The organization ofthe service brand-Thing;

Control ofexecution,etc.

4.The structure ofmarketing complex

According toKotler marketing complex is acollection ofallowing controll marketing variables, the set ofwhich the company uses inan effort toinduce the desired reaction on the part ofthe title ofthe market.

The components ofthe marketing complexare:

Trade policy.

Product is aset ofgoods and services, which the company offers tothe target market. Thus, anew painkiller could be acommodity inthe form ofa50white tablets inawhite bottle with acap that cannot close the children of, athree year shelf life, branded name Aveline and amoney back guarantee incase ofdissatisfaction with the buyer.

Communication policy (sales promotion).

Methods ofincentives are all sorts ofactivities ofthe company inorder tospread information about the merits ofthe goods and toconvince consumers tobathe init. The company pays advertising, hires salespeople pushes the product with special events, organize its propaganda.

Sales Policy.

Methods ofdistribution are all sorts ofactivities, through which product becomes available totarget consumers. Thus, the firm chooses wholesalers and retailers, toconvince them topay for the goods more attention and care for the good ofhis computation, it looks the over-passes and provides efficient transport and storage.

Pricing policy.

Price is amount ofmoney that consumers have topay for the obtaining ofgoods. The company offers retail and wholesale prices, favorable prices and discounts, sales on credit. The price should correspond the perceived value ofthe offer, otherwise buyers will acquires competitors products.

This structuring ofthe (complex) marketing fits into the concept of4P, according towhich inthe marketing complex includes 4elements, the name ofthe English language which begin with the letter P: product, promotion, place, price.

THEME 2. MARKETING RESEARCH
1.Marketing information system

Inawell-functioning organizations marketing information is collected, analyzed and distributed as part ofamarketing information system (MIS), which is part ofthe management information system oforganization.

MIS concept originated inthe United States, where it was put into implementation inthe early 70s, afew years after the development ofthe concept ofan automated control system (ACS) inthe case ofindividual-governmental organizations.

MIS is acollection (single set) ofpersonnel, equipment, procedures, and methods for collecting, processing, analysis and distribution ofthe set time reliable information necessary for the preparation and making marketing decisions. It is sometimes said that the MIS is away ofthinking through solutions tofind the necessary managers frames marketing information. It is recognized that the leaders and specialists ofmarketing are inneed ofspecific information and the methods ofits receipt. Thus, the MIS is aconceptual system that helps tosolve the problem ofhow marketing and objectives strategic planning.

The scheme ofamarketing information system is as follows:


Marketing Information System


According toPhilip Kotler, the four components that comprise the MIS are Internal Reports (Records) System, Marketing Research System, Marketing Intelligence System, and Marketing Decision Support System.

1.Internal Records: It records various data from different department ofacompany, which is regarded as amajor source ofinformation.

2.Marketing Intelligence System: It is amain source used bymanagers for gaining daily information ofthe external environment, hence assists the managers toreact tothe changing rapidly.

3.Marketing Research System: It is used tocollect primary and secondary data, and displays the results informs ofreports.

4.Marketing Decision Support System: Compared tothe supply ofthe data bythe three previous systems, it focuses more on processing the data.


MIS transforms data from internal and external sources into information necessary for managers and professionals marketing services. MIS distributes information tomanagers and specialists ofmarketing services, taking appropriate decisions. Inaddition, ISI, interacting with other automated systems inthe enterprise, delivers the right information managers ofother services enterprises. Internal information contains data on orders for products, sales, shipment ofgoods, the level ofreserves, the payment ofshipped products. Data from external sources are obtained on the basis ofmarket intelligence and market research.





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