Chapter 1.3 Fundamentals of Marketing

Market and Market Identification All products do not appeal to all customers. When making new products, marketers look for people who may have a need for their product. They also look for people who have the ability to pay for their product. All people who have similar needs and wants and who have the ability to purchase a given product are called a market.

Consumer vs. Industrial Markets T wo types of Markets: –Consumer Market: consists of consumers who purchase goods and services for personal use. Consumers are interested in the products that will save them money, make their lives easier, improve their appearance, create status in the community, or provide satisfaction. –Industrial Market: Known as the business-to- business(B-to-B) market includes all businesses that buy products for use in their operations. Businesses want products that will improve productivity, increase sales, decrease expenses, or make their work more efficient.

Market Share A market is described by the total sales in a product category. A company’s market share is its percentage of the total sales volume generated by all companies that compete in a given market. Knowing one’s market share helps marketers analyze their competition and their status in a given market. Market share changes all the time as new competitors enter the market and as the size of the market increases or decreases in volume.

Market Share

Target Market and Market Segmentation Businesses know they cannot convince everyone to buy their product. Businesses look for those who are most interested in their product or service. This involves segmenting, or breaking down the market into smaller groups that have similar needs. Market Segmentation is the process of classifying customers by needs and wants.

Target Market The group that is identified for a specific marketing program is the target market. Without a target market, a marketing plan has no focus. Identifying the target market correctly is an important key to success.

Consumers versus Customers Some products may have more than one target market. –For example: A manufacturer of children’s cereal know they need to target children and parents differently. –They have two target markets: one is the children(consumers)and the other is the parents(customers)

Target Market What might marketers do to reach parents and what might the advertising message be? When would be an appropriate time for marketers to advertise the product to children? –What might the advertising message be?

Customer Profile To develop a clear picture of their target market, businesses create a customer profile. –Lists information about the target market such as age, income level, ethnic background, occupation, attitudes, lifestyle and geographic residence.

Marketing Mix The marketing mix includes the four basic P’s: 1. Product 2. Place 3. Price 4. Promotion

Marketing Mix The four P’s are tools marketing professionals or businesses use and control in order to influence potential customers. The four elements of the marketing mix are interconnected. Actions in one effect decisions in another. Each strategy involves making decisions about the best way to reach, satisfy, and keep cusoters and achieve company goals.

Product Strategies Begins with choosing which products to make and sell. A product’s features, brand name, packaging, service, and warranty are all part of the development. By developing new uses and identifying new target markets, a company can extend the life of a product.

Marketing Mix for a New Juice Product Product decisions include naming the product and deciding how to match the target market’s need. Tropicana’s Light n’ Healthy brand has a third less sugar and a third fewer calories than regular orange juice.

Place Strategies The means of getting the product into the consumer's hands is the place factor of the marketing mix. Knowing where one’s customers shop helps marketers make the place decision. Place strategies determine how and where a product will be distributed.

Marketing Mix for a New Juice Product Place Since most people shop in supermarkets for orange juice, the place decision was an easy one.

Price Strategies Price is what is exchanged for the product. Price Strategies should reflect what customers are willing and able to pay Price strategies also include arriving at the list price or manufacturer’s suggested retail price, as well as discounts, allowances, credit terms, and payment period for industrial customers.

Marketing Mix for a New Juice Product Place Price To be competitive, Tropicana priced its Light’n Healthy brand in line with other premium orange juices.

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, the media selecte, special offers, and the timing of the promotional campaign.

Marketing Mix for a New Juice Product Place Price Promotion To be competitive, Tropicana priced its Light’n Healthy brand in line with other premium orange juices.

Marketing Mix for a New Juice Product Place Price Promotion Target Market = Health Conscious Men and Women