Download the markeing concept and product selection

THE
MARKETING
CONCEPT AND
PRODUCT
SELECTION
Microsoft Graphics Online
Objectives
• 53 – Select a product for a specific
market
• 54 – Predict the market for a specific
product using the market share factor
• 55 – Relate the marketing concept to
customers needs and wants
• 56 – Develop a marketing strategy fpr
a hypothetical business
The Marketing Concept
The plan for successful businesses. The
Marketing Concept states that businesses
must satisfy customer wants and needs in
order to make a profit.
Competition forces businesses to use the
marketing concept.
A business must have the right goods and services
at the right time, the right price, and at the
right place for purchase.
Businesses must also communicate this
information to the customer.
Customers Vs Consumers
• Customers buy the product
• Consumers are the people who
actually use the product
• In the majority of purchases the
customer and the consumer are the
same individual
• There are exceptions to this
– Gift purchased by an individual for
another person
• Manufacturer sells to a retailer who
ultimately sells to the customer
What is a Market?
A market is all potential customers who share
common needs and wants, and who
have the ability and willingness to buy the
product.
Markets are also defined by the total sales in
a product categories by competing
companies. Everyone who buys a Coke is a
part of the soft drink market.
Target Marketing
Focusing all marketing decisions on a
very specific group of people you want
to reach.
The more information you have on your
target market, the easier it is to make
the marketing decisions necessary for
profit.
Marketers spend money on market
research to more accurately identify the
important characteristics of the
target market’s customer profile.
The Marketing Mix
• The marketing mix contains four basic
marketing strategies known as “The 4
P’s of Marketing”
Product
Place
Price
Promotion
• These strategies involve the decisions
businesses must make.
• The success of the Marketing Mix depends on
how well the target market is defined and how
well the strategies are directed
toward the target audience
PRODUCT STRATEGIES
•
•
•
•
•
What product to make
How to package the product
What brand name to use
What image to project
Example
• Polaroid chose to introduce the I-Zone
camera that is a pocket size indoor
camera with an indoor flash that
produces instant mini photos or
photo stickers. The camera comes in
fashion colors and is named the I-Zone
Place Strategies
• How a product will be distributed
• Where a product will be distributed
• Example
– Polaroid chose to reach customers
through
– Mass Market Stores - Wal-Mart
– Specialty Stores – Hilo Hattie’s
– Targets were in the United States
Price Strategies
• Must reflect what customers are willing
and able to pay
• Must reflect what cost the market will
bear
• Example
– Polaroid – Suggested Retail for the IZone was $24.99
-Included trial pack of 6
exposure sticker film, two
AA batteries
-Film is priced at $5.99 and
$6.99 for sticker film
Promotion Strategies
• How potential customers will be told about
a new product
• What message will be used
• When the message about the new product will
be delivered
• What inducements to buy will be used
• Example
• Polaroid wanted to create an image of self
expression and creativity
• Polaroid used TV commercials, a public
relations campaign, and a web site with
interactive activities
Customer Needs and Wants
• Needs – items necessary for survival
Medicine
Food
Basic Clothing
• Wants – Items consumers would like
to have but that are not
necessary for survival
Gourmet Food
Designer Clothing
Market Share
A firm’s percentage of the total sales
volume generated by all competitors in
a given market.
Businesses constantly study their
market share to see how well they are
dong with a given product in relation
to their competitors.
Market Position
A company’s relative standing in relation to
their competitors.
To monitor market position a firm must keep
track of the changing size of the market and
the growth of its competitors.
Pricing may also play a role in establishing
and maintaining a firm’s market share and
market position.