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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! Page 2 5/24/2017 Key Terms • Market • Consumer market • Industrial market • Market share • Target market • Customer profile • Marketing mix Page 3 5/24/2017 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! Page 4 5/24/2017 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 Page 5 5/24/2017 Market • All people who share similar needs and wants and who have the ability to purchase a given product Page 6 5/24/2017 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: • • • • • Page 7 Save money Make life easier Improve appearance Create status in the community Provide satisfaction related to some other personal motivation 5/24/2017 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: • • • • • Page 8 Increase profits Improve productivity Increase sales Decrease expenses Make their work more efficient 5/24/2017 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! Page 9 5/24/2017 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 Page 10 5/24/2017 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 Page 11 5/24/2017 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 Page 12 5/24/2017 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 Page 13 5/24/2017 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. Page 14 5/24/2017 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. Page 15 5/24/2017 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 Page 16 5/24/2017 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 Page 17 5/24/2017 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! Page 18 5/24/2017 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 Page 19 5/24/2017 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 Page 20 5/24/2017 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 Page 21 5/24/2017 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 Page 22 5/24/2017 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 Page 23 5/24/2017 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 Page 24 5/24/2017 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. Page 25 5/24/2017