Chapter 2 Basic Marketing Concepts1 Marketing Essentials Chaper 2: The Marketing Concept

Chapter 2 Basic Marketing Concepts SECTION 2.1 What You'll Learn  The marketing concept  The difference between customers and consumers  What a market is and how it can be described  The four Ps of the marketing mix The Marketing Concept

Chapter 2 Basic Marketing Concepts3 The Marketing Concept The marketing concept states that businesses must satisfy customers ' needs and wants in order to make a profit. The Basic Concept

Chapter 2 Basic Marketing Concepts4 Customers buy a product. Consumers use the product.  Example: Parents who buy video games from retailers are customers. The kids who play the video games are the consumers.  Example: Baby formula: Consumer? Customer? Customers vs. Consumers

Chapter 2 Basic Marketing Concepts5 A market is all potential customers who share common needs and wants and who have the ability and willingness to buy the product. Could be the: Young, old, male, female, poor, rich, jock, etc…….. A combination or just one. What is a Market?

Chapter 2 Basic Marketing Concepts6 The marketing mix comprises four basic marketing strategies known as the four Ps: The Marketing Mix  Product  Place  Price  Promotion Slide 1 of 3

Chapter 2 Basic Marketing Concepts7 The Marketing Mix Product strategies include what product to make, how to package it, what brand name to use, and what image to project. Place strategies deal with how and where a product will be distributed. Slide 2 of 3 Price strategies should reflect what customers are willing and able to pay. Promotion strategies deal with how potential customers will be told about the new product, what the message will be, when and where it will be delivered, and with what inducements to buy.

Chapter 2 Basic Marketing Concepts The Marketing Mix Product, Place, Price, Promotion Let’s think of some products/services that are trending NOW… What would be the marketing mix for… 8

Chapter 2 Basic Marketing Concepts9 SECTION 2.1 The Marketing Concept Target marketing is focusing all marketing mix decisions on the specific group of people you want to reach. Target Marketing

Chapter 2 Basic Marketing Concepts10 Thinking Critically Many women ' s magazines like Glamour and Elle publish advertisement for men ' s cologne. Explain the rationale for this practice.

Chapter 2 Basic Marketing Concepts A SSESSMENT Reviewing Key Terms and Concepts 1. What does the marketing concept state? 2. Who are the customers of Sony Electronics and Hershey Chocolates? Who are their consumers? 3. What is a market? 4. What is target marketing? 5. What are the four Ps of the marketing mix?

Chapter 2 Basic Marketing Concepts12 Dividing the total market into smaller groups of people who share specific needs and characteristics is the essence of market segmentation. Market Segmentation

Chapter 2 Basic Marketing Concepts13 Market Segmentation Businesses may segment a market by: Analyzing Markets  demographics  psychographics  geographics  product benefits

Chapter 2 Basic Marketing Concepts14 Demographics refers to statistics that describe a population in terms of personal characteristics. These include: Demographics  age  gender  income  ethnic background

Chapter 2 Basic Marketing Concepts15 When marketers study age, they classify everyone according to certain generations, because each generation tends to have shared experiences and common bonds. See chart in your notes! You will be using these throughout the semester. What will the next generation be called? Here are some experts thoughts: Digital Natives, Generation Like and the Selfie Generation Demographics: Age

Chapter 2 Basic Marketing Concepts16 Companies can expand their markets by marketing to the other gender, or by marketing their products differently to men and women.  Example: Jockey entered the women ’ s market with Jockey underwear for women and doubled its sales. Demographics: Gender

Chapter 2 Basic Marketing Concepts17 Marketers want to know how much money is available for spending on different products. They look at two types of income measurement: Demographics: Income  disposable income  discretionary income Slide 1 of 2

Chapter 2 Basic Marketing Concepts18 Disposable Income = money left over after taxes.  Important for companies that produce and distribute necessities Discretionary Income = money left after paying for food, shelter, and clothing.  Important for companies that produce and distribute luxury items Demographics: Income Slide 2 of 2

Chapter 2 Basic Marketing Concepts19 Marketers often segment the market by ethnicity. The three largest ethnic groups within the United States are African-Americans, Hispanics, and Asian-Americans. These three groups will account for 33 percent of the U.S. population in Demographics: Ethnicity

Chapter 2 Basic Marketing Concepts20 Census 2000 The United States conducts a census every ten years to determine the characteristics of the population. Which ethnic group is declining? Which ethnic groups are increasing? What effects will these ethnic changes have on marketing in the United States?

Chapter 2 Basic Marketing Concepts21 Psychographics involves studies of consumers based on social and psychological characteristics. In addition to segmenting people by their leisure time interests, marketers observe trends and changes in households, the economy, politics, and the workplace. Psychographics

Chapter 2 Basic Marketing Concepts22 Geographics refers to segmentation of the market based on where people live. Marketers study geographics in relation to: Geographics  ethnic concentrations  age  ethnic background  income

Chapter 2 Basic Marketing Concepts23 Segmenting a market by product benefits involves studying consumers ' needs and wants. Product Benefits  Example: Different shampoos are marketed to people with different hair care needs.

Chapter 2 Basic Marketing Concepts24 Thinking critically How can Procter and Gamble market household products to a male market segment? What problems might P&G encounter in that endeavor?

Chapter 2 Basic Marketing Concepts Top 10 Trending Products of 2015 What would be the market for these products that are trending? Here's the link of the top 10 trending in

Chapter 2 Basic Marketing Concepts A SSESSMENT Reviewing Key Terms and Concepts 1. What do demographics, psychographics, geographics, and product benefits have in common? 2. How can a market be segmented using demographics? 3. What does the study of psychographics involve? Slide 1 of 2

Chapter 2 Basic Marketing Concepts A SSESSMENT Reviewing Key Terms and Concepts 4. Provide one example of how a marketer can segment a market based on product benefits. 5. Of what significance are the combined African-American, Hispanic, and Asian-American populations to marketers? Slide 2 of 2