Can you find the 9 steps of marketing in this picture? Purchasing – Selling – Pricing – Product Planning – Risk Management - Promotions – Financing – Distribution – Marketing Information Management

Chapter 2 Basic Marketing Concepts

I. The Marketing Concept To make a profit, a business must focus all of its efforts on satisfying the needs and wants of its customers. (or someone else will!) Companies shifted their focus from being Sales oriented to being Marketing oriented. Consumers vs. Customers: One buys a product, one uses it. How might this complicate the cereal marketer’s task? Marketing is NOT an exact science!

Kix, the first "puffed" cereal, was introduced in 1937 by the General Mills cereal company. Their slogan is "Kid-Tested, Mother-Approved!"

Customer Satisfaction: You want to create Value: the personal satisfaction gained from the use of a good/service. Consumers compare the price they pay for a product with all the benefits that come with it. Ranges from support services offered to how customers are treated. Value is NOT defined by a business; its by the CUSTOMER! Creates brand loyalty and a relationship with the customer. This is what brings customers back.

Identify Your Customers Market: the group of all potential customers who are willing and able to buy and share common needs/wants. –Who are they? “To respond to customers needs and preferences, businesses need to know them” With this knowledge you have a better ability to promote your product using print, radio or television, for example.

Mass Marketing: single marketing plan to reach all consumers. Good Product Candidates for this approach? Universal Appeal Few Features $2 billion chewing gum market: some chew, some don’t Wrigley’s markets their product to people who chew gum and at the same time, look for opportunities to attract new customers What could be one of these opportunities?

Market Segmentation Dividing the total market into smaller groups of people who share specific needs & characteristics Mass marketing from the 50’s & 60’s, mainly due to WWII shortages shifted to Market Segmentation Nowadays, there is a glut of products/services, so companies have to target to more specific groups of potential customers to be successful. This allows businesses to customize their products/services and their marketing strategies. There are 4 different Market Segmentation Methods.

Geographics A market based on where people live –Local, regional, national, global Snow shovels in Florida?

Demographics Statistics that describe a population in terms of personal characteristics. Age Gender Income Ethnic background Education Occupation Can more than one area be used at one time?

Psychographics Study of consumers based on lifestyle, and the attitudes and values that shape it. People who share interests & activities tend to have similar attitudes about products.

Product Benefits Companies build beneficial features in their products in response to consumers wants & needs.

Customer Profile When you combine geographic, demographic & pyschographic data, a complete picture of who a perspective customer is begins to emerge. See the charts on page 20

Reaching Your Customers Target Marketing: focusing all marketing decisions on the specific group (s) of people you want to reach. The more information you have on your target market, the easier it is to make your marketing decisions.

The 4 P’s The for basic marketing decisions to reach your target market: 1.Product: What to make, how to package, what brand name to use & what image 2.Place: How & where a product will be distributed 3.Promotion How potential customers will be told about the new product – what the message will be, where & when to get it and with what inducements to buy it. 4.Price: What customers are willing & able to pay

Positioning Your Product Try to get customers to think of your product or service in a certain way; you especially want to be distinguished from your competition. Positioning is NOT permanent. It will change with time. How do marketers decide on where to position their products?

1.Play to the competitions weaknesses Tylenol once used the position of: –for those that can’t take aspirin. –It won’t upset your stomach like aspirin does.

2. Look for Underserved Markets “Holes” in the marketplace. What consumers needs & preferences are not being addressed? Are there any potential customers who are not being reached?

3. Lead With Your Strengths Businesses that are the market leaders will often use that strength to position its products.

4. Target Different Market Segments Many marketers position their products by targeting different market segments. Who are the target markets for the following:

Putting it all together A low fat ice cream to fit between fat free and regular. Target Market: People who are health conscious, but not dieters Product: an ice cream with ½ the fat of regular ice cream Place: Supermarket freezers Price: about $4 a ½ gallon Promotion: Deliciously Satisfying. Half the fat and 20% fewer calories than regular ice cream

Marketing Concept Customers/consumers Customer satisfaction/value Market Mass marketing Market segmentation Target market 4 “P’s” Ways to Position a Product REVIEW