1.3 Fundamentals of Marketing MARKETING MR. PAVONE

Market and Market Identification  The terminology we are about to explore is the foundation for future work and study in marketing.  Marketers know that their product or service will not appeal to everyone and therefore, they need to look for people who might have an interest in or a need for their product; this is called a market.  Market – People who share similar needs and wants and are capable of buying products.  Though you may want a particular product, you may not be part of the market for it if you cannot afford it.

Consumer Versus Industrial Markets  A market can be described as a consumer market or an industrial market.  Consumer Market – Consumers who purchase goods and services for personal use.  Industrial Market – Businesses that buy products to use in their operations; also called the business-to-business market (this can be abbreviated as B-to-B or B2B).  Consumers are typically interested in products that will save them money, make their lives easier, improve their appearance, etc., while businesses are interested in products that will improve profits, increase sales, decrease expenses or increase efficiency.  Companies that produce products for the consumer market consider the reseller to be part of the industrial market, therefore, they must establish two different marketing plans for each market.

Market Share  A market is further described by the total sales in a product category.  Market Share – A company’s percentage of total sales volume generated by all competition in a given market.  Knowing the market share for a company helps marketers know where they stand and helps them analyze their competition.

Target Market and Market Segmentation  Market segmentation is the process of classifying customers by needs and wants in order to find ways to offer their product or service to people who are most likely to be interested in buying them.  Target Market – A group of people identified as those most likely to become customers.  Both consumer and industrial markets can be broken down into target markets and marketing strategies are directed to the specific target markets; without identifying a target market, a business’ marketing plan has no focus.  A product may have more than one target market- one for the consumer and one for the customer (example- children’s cereal).  Customer Profile – A list of information about a target market, such as age, income level, ethnicity, occupation, attitudes, lifestyle, and geographic residence.

Marketing Mix  Marketing Mix – The four basic marketing strategies, called the four Ps: product, place, price, and promotion.  The four Ps are tools marketers use to base their decisions on the people they want to win over and make into customers.  The four elements of the marketing mix are interconnected.

Product  Product decisions begin with choosing what products to make and sell, how to design it, features, brand name, packaging, service, and warranty, also what to do with currently sold products.

Place  The means of getting a product into the hands of a consumer is knowing where the customers shop; for global companies, it may mean making decisions about which countries to sell the products in and which ones not to.

Price  Price is what is exchanged for the product and should reflect what consumers are willing and able to pay, also should be reflective of accounting for what the competition is charging for comparable products.  Price strategies include arriving at the list price or manufacturer’s suggested retail price (MSRP).  A company may use special promotional pricing to adjust the suggested price for a fixed period of time, typically to launch new products.

Promotion  Promotion refers to activities related to advertising, personal selling, sales promotion, and publicity.  Promotional strategies deal with how potential customers will be told about a company’s products, including the message, media selected, special offers and timing of the campaigns.