- click twice to continue - SECTION 1.2 REVIEW Fundamentals of Marketing Lesson 1.3 - click twice to continue -

Fundamentals of Marketing Objectives Describe the concept of market Differentiate consumer and industrial markets Describe market share Define target market List the components of the marketing mix Note: Try to memorize the terms in this section, because you will use them throughout your study of marketing! Marketing Essentials Chapter 1, Section 1.3

Can you expect your product to appeal to everyone? Market Can you expect your product to appeal to everyone? Market X, refers to all the people who might buy a product who: Share similar needs and wants Have the ability to purchase a product Example: If you have an interest in hunting and want a Bonnelli Shot Gun, you are in a specific market No Therefore, you must look for people who it will appeal to (who would be interested in it) Marketing Essentials Chapter 1, Section 1.3

Types of Markets There are two different types of markets with different goals and objectives Consumer Industrial

Consumer Versus Industrial Markets Consumer market: all consumers who purchase goods and services for personal use Consumers want products and services that: Save money Make life easier Improve appearance Create status Provide personal satisfaction Marketing Essentials Chapter 1, Section 1.3

Consumer Versus Industrial Markets industrial market: businesses that buy products, often in large quantities, to use in their operations; Businesses want products and services that: Improve productivity Improve efficiency Increase sales Decrease expenses

For example, Perdue advertises its chicken and turkey products: A single product may be promoted to both the consumer and industrial markets. For example, Perdue advertises its chicken and turkey products: On television and in newspapers, they are marketing to consumers In the publication/magazine Supermarket News, they are marketing to other businesses - those professionals in the supermarket industry Note: Businesses will have two separate and distinct marketing plans to reach each market Marketing Essentials Chapter 1, Section 1.3

Assignment Opinion: What company sells the largest number of cell phone sales in the cell phone market? Go to our the class Webpage and Read the Market Share Article Read and complete the notes for this section

Assignment Go to our Webpage and Read Market Share Article Read and complete the notes for this section

Market share is your share or proportion of sales of a particular product or service in the market. Your gross sales divided by the Total gross sales of the market market leaders the company with the largest market share) market challengers the companies attempting to obtain the largest market share market followers don't compete because they are happy to just follow the trends established by the leader and challengers. market nicher, concerned with accumulating large market share but rather decides to operate in a small segment of a market. - gain a strong market share of a special piece of the general market.

Market Share Example: If you sell in the Blue Ray players Total Sales = $4,567,850 Your Sales = $2,985,000 What is your total Market share? 2,985,000/4,567,850 = 65.3% 248,000 / 1,500,000 =16.5% 237,000/1,500,000 = 15.8% 32.3-100 = 67.7 Marketing Essentials Chapter 1, Section 1.3

Market Share Example: If you sell in the video game market Total Sales = 1,500,000 Your Sales = 248,000 What is your total Market share? If “Competitor X” has sales of 375,000 what is its market share? Competitor Y has 45% of the market. What percentage of the market is with all your other competitors? Are you in a good position? Unclear because you don’t know all the competition! 248,000/1,500,000= 16.5% 375,000/1,500,000= 25% 248,000 / 1,500,000 =16.5% 237,000/1,500,000 = 15.8% 32.3-100 = 67.7 100 – (16.5 +25+45) = 13.5% Marketing Essentials Chapter 1, Section 1.3

Market share changes continually as: New competitors enter the market The market’s volume increases or decreases Is it important to know your market share? Why? Helps you analyze your competitors and their position in the market. 248,000 / 1,500,000 =16.5% 237,000/1,500,000 = 15.8% 32.3-100 = 67.7 Marketing Essentials Chapter 1, Section 1.3

Athletic Shoe Market Is there a Market Leader? Challenger? Any Followers you think? Video on Shoe Market

Target Market and Market Segmentation Marketers look for ways to find those who want their product most: market segmenting: is the process of classifying customers by needs and wants Goal = find people most likely to become customers target market: A group of people identified as those most likely to become customers all marketing strategies directed at target market

Target Market and Market Segmentation Will your product only target one market? A single product may have these two target markets: Consumers –those that use or consume product Customers – those that purchase the product For example, who are childrens cereal targeted at Children- request it and eat it= Parents - approve and buy it = No Consumers Customers

How would you reach children? How would you reach parents? Children: television commercials on disney channel, during cartoons, : how fun it is too eat cereal and how good it tastes Parents: in magazines on how safe, healthy and nutritious it is

Customer Profile To develop a clear picture of its target market, a business may create a customer profile customer profile X A list of information about the member of a target market What are some things that can be used to segment a target market? Student contributions?

Customer Profile There are many ways to segment a market. The most common ways to segment a target market: Age Income level Ethnic background Occupation Attitudes Lifestyle/Interests/Hobbies Geographic residence

Snowmobile: Age Gender Income level Geographic residence Ethnic background Occupation Lifestyle/Interests/Hobbies Attitudes

Marketing Mix The marketing mix X includes four basic marketing strategies, or tools, called the four Ps that is used to influence buying decisions of a target market product price promotion place

Marketing Mix Actions & decisions in the 4 Ps are based on the people marketers want to win over What do we as marketers call them? The Target market Target Market

Marketing Mix Video: Click frame below to play video. If this does not work, click the “Video” link for the Youtube video! Marketing Essentials Chapter 1, Section 1.3

Product Product: Any reason/feature that makes people want the product (good or service) Much goes into Product design: Variety Quality Design Package Brand Features – size of screen, color, material Service - ie: two yr free inspection on a new car Warranty – ie.e money back guarantee, # of years replacement

Price Price: what is the value of the product/service to the customer in terms of money. Consumer Pricing and Industrial pricing is different Consider what competition is charging Consumer pricing = Retail Pricing Retail price is the amount paid by consumers Bonus (get additional items with your purchase) Payment Options/Plans – layaway plans Marketing Essentials Chapter 1, Section 1.3

Price Price: what is the value of product/service to the customer in terms of money. Industrial market Pricing= Wholesale Price Establish both a wholesale price for the retailer and a suggested retail price Establish discount prices example, if you buy 24 @ $29.00 if you buy 48, $22.00 each. Establish credit terms and payment terms Example: 30 days to pay at no interest, after that you pay interest/late fees. Marketing Essentials Chapter 1, Section 1.3

Promotion Promotion: Where, when and how you deliver your marketing messages to your target market (how you tell them about your products) Includes: Advertising Selling and sales calls – face to face/door to door Sales events Special offers (buy one get one free) Public Relations – news releases, community service Sponsorships and endorsements Brochures Timing of promotional campaigns

Place Place: how does your customer find your product and get what they paid for - where to sell and distribute a product. Retail locations - know where target market shops Delivery options – delivered to door, pick up in store, download it Purchase options – sell in retail stores or online, vending machines Who to sell too - directly to consumers, to businesses, or both Sell Internationally, locally, or on internet How did it get to retail store - distribution method to use (warehouse, air, ship, rail) Logistics = stock levels – how much on hand how quickly can it be delivered

Product: 1/3 Less Sugar/Calories No Pulp Pour Spout Design Brand: Light N Healthy Tropicana Place: Grocery Stores Gas/Convenience Stores Global Distribution – ship, truck, train Warehouse to store Price: Inline with competitors What customers willing to pay Have a price of industrial market Retail Price for consumers Have Discounts for industrial mkt Credit terms for industrial market Promotion TV Commercials Newspapers Fitness Magazines Health Magazines Family Magazines Sales Calls w/samples