The Two C’s of Marketing In order to adequately put together the four P’s of marketing, businesses must also consider two major external factors: The Competition The Consumer (The target market)

The Competitive Market The competitive market consists of the total dollars in sales spent on a particular type of product. Example: The US soft drink industry is worth $68 billion dollars. The portion of that $68 billion that was Coca Cola sales or any other company’s sales is called market share. Market share is expressed in terms of %’s.

2007 Estimated U.S Market Share for Major Soft Drink Brands ($68 billion) Coca-Cola Classic 16.5 Pepsi 12.3 Diet Coke 10.2 Mountain Dew 6.5 Diet Pepsi 5.9 Sprite 5.8 Dr. Pepper 5.7 Total 62.9% Note: That leaves 37.1% of the market for the other 200 brands of soft drinks available in the market.

Market Segment Market Segment Market segment is a part of the overall market that has similar characteristics. Example: Within the soft drink market, you have: 1. The flavoured segment, such as Root Beer, Orange Crush, etc; 2. The diet segment such as Diet Coke, Diet Pepsi; and 3. The energy drink segment such as Red Bull.

Increasing a Company’s Market Share There are two ways in which a company can increase its market share. 1. Creating a new segment of the market Example: Bottled water in the 1990’s. Energy drinks in 2000’s. 2. Taking sales away from your competition

Types of Competition Direct Competition Indirect Competition Companies who sell similar products to ours. Examples: Coke vs. pepsi One brand of sunscreen versus another brand Loblaws versus Metro Companies compete through quality, price, design, features, benefits and simply image preference. Indirect Competition Products and/or companies that don’t necessarily sell similar or related products. Examples: Will you go to the movies or go bowling instead? Will you fly or will you take the train? Will you go out to dinner or spend it on a new outfit instead?

The Consumer Market Companies also compete with each other by studying the types of consumers who buy their products. The store clerk is not asking for your postal code because s/he has a personal interest in you – but the company s/he works for does. The better a company knows their customers, they better equipped they are to know what to do to target similar consumers and increase their sales.

The Consumer Market Consumers can be identified or targeted in at least two ways: Through demographics Through lifestyle characteristics Understanding the categories under which consumers fit, helps marketers when making pricing, advertising, product development and distribution decisions.

1. Demographics Demographics Organizing individuals into categories such as: 1. Age 2. Gender 3. Family Life Cycle 4. Income Level 5. Education Level 6. Ethnicity and Culture

Age Demographics Age often defines our tastes, needs, and our wants. Examples: Teenagers want….. Adults are interested in…. Seniors are interested in ….

Age Demographics Gatekeepers The person making the purchasing decision, but may not be the consumer Example: Parents may decide upon the cereal to purchase for their child to consume, thus affecting what features may be advertised for parents (low in sugar). Saturday morning cartoons may still feature a cereal commercial with a cartoon character for the child to identify with.

Gender Demographics Times have changed and products whose advertising use to target a particular gender is now changing to target the other or/and both. Examples: More women are making the purchasing decision when it comes to buying a car, tools, and sporting equipment. Hotel rooms added hair dryers and ironing boards as more women entered the workplace and business industry.

Family Life Cycle Demographics Needs, wants, and interests typically vary depending on what stage in life one is in. Examples: Newly married couples are interested in… Parents with a new baby are interested in.. A couple with 3 teenagers are interested in… Retired seniors are interested in….

Income Level Demographics Business selling luxury goods and services are interested in learning about wealthy consumers. Most businesses target average incomes and compete for the discretionary income of consumers. Examples Postal codes indicate the area in which someone lives. Income levels can be estimated based on the type of homes found in most areas. A company selling a luxury yaught is not going to advertise in the Penny Saver, but rather a luxury travel magazine.

Discretionary Income Discretionary Income Income/money that is not committed to pay for basic necessities such as food, clothing, and shelter. Teenagers generally have the highest amount of discretionary income from their part-time jobs. Why?

Ethnicity and Culture Demographics Canada’s diverse population brings with it diverse interests, wants and needs. Examples: Restaurants targeting various cultural food tastes Newspapers and magazines are available in over 100 languages in Canada.

2. Lifestyle or Psychographics Characteristics Characteristics including the way people live, - their values, beliefs, and motivations. Examples: Environmentally conscious person may purchase…. An extreme sports enthusiast may be interested in…. A tech savy enthusiast may be interested in…

Sources Wilson, Jack et al. The World of Business., 5 Ed., Nelson Education Ltd., Canada, 2007