PPT 4 Revisi

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MGMT6413

Introduction to
Business and
Economics

Week 04
Marketing Processes and Market
System
LEARNING OUTCOMES

LO 2 : Apply the business economics to business decision making


remains the key driving force in firm profitability. 
OUTLINE
• Marketing management
• Marketing Strategy
• Supply and Demand
• Elasticity and Its Applications
Marketing management

Explain the concept of marketing


Definition
• Marketing : activities, a set of institutions, and processes
for creating, communicating, delivering, and exchanging
offerings that have value for customers, clients, partners,
and society at large
Basic Fundamentals Of Marketing
Management
• Delivering Value
• Value and Benefits
• Value and Utility
• Goods, Services, and Ideas
• Relationship Marketing and Customer Relationship Management
• Relationship Marketing : marketing strategy that emphasizes building
lasting relationships with customers and suppliers
• Customer Relationship Management (CRM) : organized methods that
a firm uses to build better information connections with clients, so
that stronger company-client relationships are developed
Marketing Strategy

Explain the marketing strategy


Planning the Marketing Mix

• Marketing Strategy : all the


marketing programs and
activities that will be used to
achieve the marketing goals

Figure 4.1. Componens of the


marketing plan
Four Basic Components Marketing
Mix
Product
good, service, or idea that is marketed to fill consumers’ needs and wants

Pricing
process of determining the best price at which to sell a product

Place (distribution)
part of the marketing mix concerned with getting products from producers to
consumers

Promotion
aspect of the marketing mix concerned with the most effective techniques for
communicating information about products
Target Marketing and Market
Segmentation
Target Market : the particular group of people or organizations on which a
firm’s marketing efforts are focused
Market Segmentation : process of dividing a market into categories of
customer types, or “segments,” having similar wants and needs and who can
be expected to show interest in the same products
Identifying Market Segments
• Geographic Segmentation
• Demographic Segmentation
• Geo-Demographic Segmentation
• Psychographic Segmentation
• Behavioral Segmentation
Demand and Supply

Demonstrate the concepts of demand and supply in achieving market


equilibrium
Demand
• demand schedule a table that shows the relationship between the
price of a good and the quantity demanded
• demand curve a graph of the relationship between the price of a
good and the quantity demanded
• law of demand the claim that, other things being equal, the quantity
demanded of a good falls when the price of the good rises
Demand : Example

The demand schedule shows the quantity demanded at each price. The demand curve, which graphs the demand schedule, shows how
the quantity demanded of the good changes as its price varies. Because a lower price increases the quantity demanded, the demand
curve slopes downward.
Demand
Shifts in the Demand Curve

Any change that raises the quantity that buyers wish to purchase at a given price shifts the demand curve to the right. Any change that lowers the quantity
that buyers wish to purchase at a given price shifts the demand curve to the left.
Supply
• supply schedule a table that shows the relationship between the
price of a good and the quantity supplied
• supply curve a graph of the relationship between the price of a good
and the quantity supplied
Supply : Example
Supply
Shifts in the Supply Curve

Any change that raises the quantity that sellers are willing to produce and offer for sale at a given price shifts the supply curve to the right. Any change that
lowers the quantity that sellers are willing to produce and offer for sale at a given price shifts the supply curve to the left.
Equilibrium
The equilibrium is found where
the supply and demand curves
intersect. At the equilibrium
price, the quantity supplied
equals the quantity demanded.
Here the equilibrium price is
€2: at this price, 7000 tonnes of
rape seed are supplied and
7000 tonnes are demanded.
Market non Equilibrium

Markets Not in Equilibrium


In panel (a), there is a surplus. Because the market price of €2.50 is above the equilibrium price, the quantity supplied (10000 tonnes) exceeds the
quantity demanded (4000 tonnes). Suppliers try to increase sales by cutting the price of rape seed, and this moves the price toward its equilibrium
level. In panel (b), there is a shortage. Because the market price of €1.50 is below the equilibrium price, the quantity demanded (10000 tonnes)
exceeds the quantity supplied (4000 tonnes). With too many buyers chasing too few goods, suppliers can take advantage of the shortage by raising
the price. Hence, in both cases, the price adjustment moves the market towards the equilibrium of supply and demand.
Elasticity

Demonstrate the elasticity of supply and demand in the business case


Elasticity
• elasticity a measure of the responsiveness of quantity demanded or
quantity supplied to one of its determinants
Elasticity of Supply
Elasticity of Demand
Elasticity of Demand

• Elastic demand If demand is (price) elastic, then any change in price


will cause the quantity demanded to change proportionately more.
(Ignoring the negative sign) it will have a value greater than 1.
• Inelastic demand If demand is (price) inelastic, then any change will
cause the quantity demanded to change by a proportionately smaller
amount. (Ignoring the negative sign) it will have a value less than 1.
• Unit elasticity When the price elasticity of demand is unity, this is
where quantity demanded changes by the same proportion as the
price. Price elasticity is equal to −1.

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