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Chapter 1.3
Fundamentals of Marketing
Market and Market Identification
• All products do not appeal to all customers.
• When making new products, marketers look for
people who may have a need for their product. They
also look for people who have the ability to pay for
their product.
•All people who have similar needs and wants and who
have the ability to purchase a given product are called a
market.
Consumer vs. Industrial Markets
• Two types of Markets:
– Consumer Market: consists of consumers who
purchase goods and services for personal use.
• Consumers are interested in the products
that will save them money, make their lives
easier, improve their appearance, create
status in the community, or provide
satisfaction.
– Industrial Market: Known as the business-tobusiness(B-to-B) market includes all businesses
that buy products for use in their operations.
• Businesses want products that will improve
productivity, increase sales, decrease
expenses, or make their work more efficient.
Market Share
• A market is described by the total sales in a
product category.
• A company’s market share is its percentage
of the total sales volume generated by all
companies that compete in a given market.
• Knowing one’s market share helps marketers
analyze their competition and their status in a
given market.
• Market share changes all the time as new
competitors enter the market and as the size
of the market increases or decreases in
volume.
Market Share
Market Share
Target Market and Market
Segmentation
• Businesses know they cannot convince
everyone to buy their product.
• Businesses look for those who are most
interested in their product or service.
• This involves segmenting, or breaking down
the market into smaller groups that have
similar needs.
• Market Segmentation is the process of
classifying customers by needs and wants.
Target Market
• The group that is identified for a specific
marketing program is the target
market.
• Without a target market, a marketing
plan has no focus.
• Identifying the target market correctly is
an important key to success.
Consumers versus Customers
• Some products may have more than
one target market.
– For example: A manufacturer of
children’s cereal know they need to target
children and parents differently.
– They have two target markets: one is the
children(consumers)and the other is the
parents(customers)
Target Market
• What might marketers
do to reach parents
and what might the
advertising message
be?
• When would be an
appropriate time for
marketers to advertise
the product to
children?
– What might the
advertising message
be?
Customer Profile
• To develop a clear picture of their
target market, businesses create a
customer profile.
– Lists information about the target market
such as age, income level, ethnic
background, occupation, attitudes,
lifestyle and geographic residence.
Marketing Mix
• The marketing mix includes the
four basic P’s:
• 1. Product
• 2. Place
• 3. Price
• 4. Promotion
Marketing Mix
• The four P’s are tools marketing
professionals or businesses use and
control in order to influence potential
customers.
• The four elements of the marketing
mix are interconnected. Actions in
one effect decisions in another.
• Each strategy involves making
decisions about the best way to reach,
satisfy, and keep customers and
achieve company goals.
Product Strategies
• Begins with choosing which products
to make and sell.
• A product’s features, brand name,
packaging, service, and warranty are
all part of the development.
• By developing new uses and
identifying new target markets, a
company can extend the life of a
product.
Marketing Mix for a New Juice
Product
Product decisions include naming
the product and deciding how to
match the target market’s need.
Tropicana’s Light n’ Healthy
brand has a third less sugar and a
third fewer calories than regular
orange juice.
Place Strategies
• The means of getting the product into
the consumer's hands is the place
factor of the marketing mix.
• Knowing where one’s customers shop
helps marketers make the place
decision.
• Place strategies determine how and
where a product will be distributed.
Marketing Mix for a New Juice
Product
Place
Since most people shop in
supermarkets for orange
juice, the place decision was
an easy one.
Price Strategies
• Price is what is exchanged for the
product.
• Price Strategies should reflect what
customers are willing and able to pay
• Price strategies also include arriving at
the list price or manufacturer’s
suggested retail price, as well as
discounts, allowances, credit terms,
and payment period for industrial
customers.
Marketing Mix for a New Juice
Product
Place
Price
To be competitive, Tropicana
priced its Light’n Healthy
brand in line with other
premium orange juices.
Promotion
• Promotion refers to activities related
to advertising, personal selling, sales
promotion, and publicity.
• Promotional strategies deal with
how potential customers will be told
about a company’s products, including
the message, the media selected,
special offers, and the timing of the
promotional campaign.
Marketing Mix for a New Juice
Product
Price
Place
Promotion
To be
competitive,
Tropicana priced
its Light’n
Healthy brand in
line with other
premium orange
juices.
Marketing Mix for a New Juice
Product
Place
Target Market
=
Health Conscious
Men and Women
Price
Promotion