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! 4/5/2019

Key Terms Market Consumer market Industrial market Market share Target market Customer profile Marketing mix 4/5/2019

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! 4/5/2019

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 4/5/2019

Market All people who share similar needs and wants and who have the ability to purchase a given product Note: Just because a group of people are in one market does not mean they will all be a part of another. For example, if I am a part of the tennis market, I may not be a part of the SUV market. 4/5/2019

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: Save money Make life easier Improve appearance Create status in the community Provide satisfaction related to some other personal motivation 4/5/2019

Consumer Versus 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: Increase profits Improve productivity Increase sales Decrease expenses Make their work more efficient 4/5/2019

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! 4/5/2019

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 4/5/2019

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 4/5/2019

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 4/5/2019

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 4/5/2019

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. 4/5/2019

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. 4/5/2019

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 4/5/2019

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 4/5/2019

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! 4/5/2019

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 4/5/2019

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 4/5/2019

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 4/5/2019

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 4/5/2019

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 4/5/2019

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 4/5/2019

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. 4/5/2019