Download Fundamentals of Marketing

Fundamentals of Marketing
Chapter 1, Section 3
Critical Thinking…
• Take 2-3 minutes to reflect on one
recent marketing trend you have noted
(either through the media or by your
own observation)
• You will share your observation in a few
minutes!
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Key Terms
• Market
• Consumer market
• Industrial market
• Market share
• Target market
• Customer profile
• Marketing mix
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Market and Market Identification
• FYI: There are A LOT of terms in this
section that are important for your
future studies in Marketing…PAY
ATTENTION AND TAKE GOOD NOTES!
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The Reality…
• Marketers know that their products or
services cannot appeal to EVERYONE
• It is essential that marketers look for
people who:
– A) have an interest or need for their product
and,
– B) have the ability to pay for their product
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Market
• All people who share similar needs and
wants and who have the ability to
purchase a given product
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Consumer versus Industrial Markets
• Consumer Market
– Consists of consumers who purchase goods and
services for personal use
– Consumers’ purchase goods and services based on
these main areas:
•
•
•
•
•
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Save money
Make life easier
Improve appearance
Create status in the community
Provide satisfaction related to some other personal
motivation
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Consumer Versus Industrial Market
• Industrial Market
– Also called business-to-business (B2B) market,
includes all businesses that buy products for use
in their operations.
– Goals are different in this market:
•
•
•
•
•
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Increase profits
Improve productivity
Increase sales
Decrease expenses
Make their work more efficient
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Consumer versus Industrial Market
• Companies producing products for the
consumer market classify resellers as a
part of the industrial market
• Therefore, these companies require two
distinct marketing plans to reach each
market!
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Market Share
• A market is further defined by the total sales in the
product category
• Market Share
– A company’s percentage of total sales volume
generated by all companies that compete in a given
market
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Market Share, cont.
• Knowing one’s market
share helps marketers
analyze their competition
and their status in a
given market
• Market shares change all
the time as new
competitors enter the
market and the size of
the market increases or
decreases in volume
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Target Market and Market
Segmentation
• Businesses know that not EVERYONE will buy their
products or services
• They look for ways to offer their products or services to
the people who are most likely to be interested
• This involves segmenting, or breaking the market into
smaller groups that have similar wants and needs
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Target Market and Market Segmentation
• Segmentation goes beyond classification into the
consumer or industrial market
• Market segmentation seeks to find the group of
people most likely to become customers
• The group that is identified for a specific
marketing program is the target market
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Target Marketing – Why?
• Identifying a target market is very important
because all marketing strategies are directed at
this group.
• When a business fails to identify a target
market, its marketing plan has no focus.
• Identifying a target market correctly is a key to
success.
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Consumers versus Customers
• A product may have more than one target
market
• Case Study Example: Build-a-Bear knows
they need to target children and parents
differently.
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Consumers versus Customers, cont.
Case Study Example, cont.:
• Children are the consumers, the ones who
will ask for the bears and play with them
• Parents are the customers, the ones who
need to approve it, and the ones who will pay
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Customer Profiles
• Lists information about the target market such
as
–
–
–
–
–
–
–
Age
Income Level
Ethnic Background
Occupation
Attitudes
Lifestyle
Geographic Residence
• Businesses develop these to get a clear
picture of their target market
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Think Critically & Discuss…
• Work in a group of four (4) to build a
customer profile for Dierberg’s
• You will share with the class in 10 minutes
• Be prepared to back up your ideas!
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Marketing Mix
• These are the tools marketing professionals
use and control to influence potential
customers
• Include the four basic P’s of marketing
strategies:
–
–
–
–
Product
Place
Price
Promotion
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Marketing Mix, cont.
• Some would add a 5th “P”, PEOPLE, as it
is necessary to have a clearly defined
target market before you can create
marketing strategies
• All of the “P’s” are interconnected
– Actions in one area, affect decisions in
another
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Product
• This “P” revolves around making decisions
about what to make and sell
• Some marketing strategy examples of this P
include:
–
–
–
–
–
Features of the new iPhone
The brand name of a new Nabisco breakfast food
How to package a new organic Hershey candy bar
What the warranty of a Sony Bravia LCD will entail
How to update and improve the Ford Focus so it
can remain competitive
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Place
•
The means of getting the product into the consumer’s hands
•
It is important to know where one’s target market shops!
•
Examples of marketing decisions based on place include:
– Whether a local bakery should build additional stores on the Illinois
side of the river
– Whether Build-a-Bear should create a website where customers can
purchase their products
– Whether Tropicana should have products shipped via air or rail
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Price
• What is exchanged (monetarily) for the product
• This strategy must consider what customers are
willing and able to pay
• Examples of pricing strategy decisions include
– Toyota’s suggested manufacturer’s retail price on the Camry
– Wal-Mart offering credit terms (i.e., their own credit card) at
their stores
– Hollister having an “End of Summer Sale” on select items
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Promotion
• Deal with how potential customers will be
told about a company’s products
• Examples of promotion strategy include
– The 2010 Nike Shock campaign:
• The message used (language, style, approach)
• The media that is used to spread the word about the
shoe
• The special offers Nike will employ to create buzz and
business
• The timing of the campaigns and the product roll-out
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Quick Review…
• What is the difference between the consumer
and industrial markets?
• What is the relationship among market
segmentation, target markets, and customer
profiles?
• Name the four P’s of the marketing mix and
explain the importance of a target market for
each of them.
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