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Advertising and Sales Promotion ©2013 Cengage Learning. All Rights Reserved. Chapter 3.

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Presentation on theme: "Advertising and Sales Promotion ©2013 Cengage Learning. All Rights Reserved. Chapter 3."— Presentation transcript:

1 Advertising and Sales Promotion ©2013 Cengage Learning. All Rights Reserved. Chapter 3

2 Advertising and Sales Promotion ©2013 Cengage Learning. All Rights Reserved. The Basics of Marketing 3.1 The Marketing Concept 3.2 The Target Market 3.3 Market Segmentation 2 CHAPTER 3

3 Advertising and Sales Promotion ©2013 Cengage Learning. All Rights Reserved. 3.1 The Marketing Concept Goals Explain the marketing concept. Define the functions of marketing. 3 CHAPTER 3

4 Advertising and Sales Promotion ©2013 Cengage Learning. All Rights Reserved. 3.1 The Marketing Concept Terms Marketing Marketing – is all of the processes used to identify, create, and maintain exchange relationships that satisfy individuals and organizations marketing concept marketing concept – identifying and satisfying the needs of customers during the development and marketing of a product or service. marketing mix marketing mix – the combination of four marketing elements – products, price, distribution and promotion – used by a business marketing functions marketing functions – related activities that must be completed to accomplish an important marketing goal marketing plan marketing plan – a written description of the marketing objectives and the planned marketing strategies and activities required to meet those objectives 4 CHAPTER 3

5 Advertising and Sales Promotion ©2013 Cengage Learning. All Rights Reserved. What Is Marketing? The marketing concept The marketing concept Focusing on customer needs and wants to develop and market products and services that are considered better than competitors’ products or services Applying the marketing concept to the marketing mix Satisfying customer needs and wants while operating profitably The marketing mix The marketing mix Product – good or service produced to meet consumer demand Price – the amount customers pay for a good or service Distribution – having the product in the right place at the right time Promotion – builds relationships with customers creating favorable impression of its products or services 5 CHAPTER 3

6 Advertising and Sales Promotion ©2013 Cengage Learning. All Rights Reserved. Marketing Functions Market planning – identifying target market Product and service management – creating products and services that meet the needs of customers Distribution – best methods so that customers can locate the product or service Pricing – Communicating the value of products and services to customers Promotion – Communication of information about products and services Selling – direct, personal communication with prospective customers Marketing-information management – Collecting and managing information Financing – budget and provide financial assistance to customers Risk management – Identifying potential risks 6 CHAPTER 3

7 Advertising and Sales Promotion ©2013 Cengage Learning. All Rights Reserved. Marketing Functions (continued) Putting the marketing functions into action Vizio incorporating the latest technologies to produce a variety of h-gh definition and 3D TV’s Netflix gained success through its distribution strategy, first by delivering DVD movie rentals through the mail and later by delivering them via the web or on game consoles Grocery checkout lines gives customers the opportunity to save money with a plus card which also helps the store offer the most demanded items by customers McDonalds and Subway uses the market planning function to expand globally The marketing plan – marketing objectives 7 CHAPTER 3

8 Advertising and Sales Promotion ©2013 Cengage Learning. All Rights Reserved. Check Point and Assessment Why is marketing an important business function? What is the marketing concept? What is the marketing mix and why is it important? Describe how the nine marketing functions might be utilized by a business where you shop? 8 CHAPTER 3

9 Advertising and Sales Promotion ©2013 Cengage Learning. All Rights Reserved. 3.2 The Target Market Goals Define target market. Explain the process for selecting target markets. 9 CHAPTER 3

10 Advertising and Sales Promotion ©2013 Cengage Learning. All Rights Reserved. 3.2 The Target Market Terms target market target market – a specific group of consumers to whom the business wants to sell its products or services niche market niche market – a smaller market that has a unique set of needs integrated marketing communication (IMC) integrated marketing communication (IMC) – a strategy used to plan, execute, and monitor all promotional messages about a product to ensure consistency among all those messages 10 CHAPTER 3

11 Advertising and Sales Promotion ©2013 Cengage Learning. All Rights Reserved. What Is a Target Market? Building success using target markets Building success using target markets Clear understanding of who is likely to be interested in the products and services offered Spend a lot of time and money on research to identify target markets Ongoing process for businesses of all sizes 11 CHAPTER 3

12 Advertising and Sales Promotion ©2013 Cengage Learning. All Rights Reserved. What Is a Target Market? Target market strategies Target market strategies Establishing relationships with consumers in several different target markets. Establishing relationships with consumers in several different target markets. Undifferentiated strategy – one big market. Marketing mix is used for the entire market. Lowers marketing costs Undifferentiated strategy – one big market. Marketing mix is used for the entire market. Lowers marketing costs Concentrated Strategy – used for a niche market. Small unique set of needs. Concentrated Strategy – used for a niche market. Small unique set of needs. Multiple-Segment Strategy – choose to serve two or more target markets. Example department store selling clothing, sportswear, shoes cookware and cosmetics. Multiple-Segment Strategy – choose to serve two or more target markets. Example department store selling clothing, sportswear, shoes cookware and cosmetics. 12 CHAPTER 3

13 Advertising and Sales Promotion ©2013 Cengage Learning. All Rights Reserved. Selecting a Target Market Effective target markets helps a business grow by bringing in new customers and retaining current ones. Characteristics may include: Common important needs People in the target market can afford the product or service Demand for the product or service by the target market is high enough to produce a profit Adequate data available Target market examples The youth market The luxury-auto market 13 CHAPTER 3

14 Advertising and Sales Promotion ©2013 Cengage Learning. All Rights Reserved. Check Point and Assessment Why is it important for a business to identify a target market? What are two identifying characteristics of an effective target market? List three products and describe the target market for each product. 14 CHAPTER 3

15 Advertising and Sales Promotion ©2013 Cengage Learning. All Rights Reserved. 3.3 Market Segmentation Goals Differentiate between market segmentation and mass marketing. Describe market segmentation categories. Explain how to select market segments that have market potential. 15 CHAPTER 3

16 Advertising and Sales Promotion ©2013 Cengage Learning. All Rights Reserved. 3.3 Market Segmentation Terms market segmentation – the process of dividing a large group of consumes into meaningful subgroups based on identifiable and similar characteristics and needs mass marketing – a marketing strategy used to appeal to a large, general group of consumers customer profile – a description of the characteristics exhibited by an individual who is likely to buy a business’s products or services geographic segmentation – the segmentation of consumers based on where they live Demographics – a personalized presentation that shows how a product can benefit and provide value to the customer 16 CHAPTER 3

17 Advertising and Sales Promotion ©2013 Cengage Learning. All Rights Reserved. 3.3 Market Segmentation Terms Psychographics – a description of consumers’ interest, attitudes, opinions, and lifestyles product usage – the amount of a product purchased and used by a consumer benefit segmentation – the segmentation of consumers based on specific benefits they expect to receive from a product or service market share – a business’s portion of the total sales generated by all of the businesses operating in the same market 17 CHAPTER 3

18 Advertising and Sales Promotion ©2013 Cengage Learning. All Rights Reserved. Market Segmentation vs. Mass Marketing Market segmentation and target markets Automobile insurance companies consider all drivers as potential customers then identifies the location of the driver, their driving record, their age and types of coverage needed. Then they study needs, attitudes and trends related to the different market segments. Offering the best market opportunities. Mass marketing – reaching a larger audience gaining wider exposure, increased sales volume and lower marketing costs. 18 CHAPTER 3

19 Advertising and Sales Promotion ©2013 Cengage Learning. All Rights Reserved. Customer Profile: Types of Segmentation Geographic segmentation – where you live Demographic segmentation – age, gender, race, marital status, income, education level and occupation Psychographic segmentation – your likes Product usage segmentation – amount of a product purchased and used Benefit segmentation – what the product offers as an extra 19 CHAPTER 3

20 Advertising and Sales Promotion ©2013 Cengage Learning. All Rights Reserved. Selection of Market Segments Identifying market segments Select a market or product category to study Choose a basis for segmenting the market Collect and analyze data Identify market segments Select the market segments with the most potential 20 CHAPTER 3

21 Advertising and Sales Promotion ©2013 Cengage Learning. All Rights Reserved. Selection of Market Segments Analyzing market potential Market segment is measurable Capable of producing a product or service at a price that meets customers’ wants and needs Potential customers and the potential for growth Accessible Serve the market segment more effectively than competitors can 21 CHAPTER 3

22 Advertising and Sales Promotion ©2013 Cengage Learning. All Rights Reserved. Check Point and Assessment What is the difference between market segmentation and mass marketing approaches? How are psychographics useful to marketers? What steps are involved in identifying a market segment? What is a customer profile and why is it important? 22 CHAPTER 3


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